A listed Midland buy-to-let mortgage lender has signed a £200 million loan facility with Lloyds Bank to help fund new mortgages.
Solihull based Paragon received the additional warehouse funding, a line of credit used by mortgage bankers, through the bank’s wholesale division.
The company intends to use the facility to originate mortgage loans prior to arranging term funding in the mortgage backed securitisation markets.
Paragon already has a £200 million warehouse facility provided by Macquarie Bank and negotiations are progressing well for an extension to the facility at the end of the commitment period in December 2012, the company said.
The new facility, rated by Fitch Ratings, will be available to Paragon Fifth Funding, an independent special purpose vehicle company.
Nigel Terrington, chief executive, said: “This additional facility will be used to fund further buy-to-let mortgage lending in a market that has continued to gain momentum, and we look forward to growing this area of our business.”
Paragon concluded a capital markets securitisation of buy-to-let mortgages in November 2011 through its subsidiary company, Paragon Mortgages.
The company will announce its full year results for the 12 months to September 30 on November 20.