Banks may use bond markets to refinance split mortgages

Permanent TSB lobbying ECB to reclassify split mortgages as performing loans

 Permanent TSB has the highest ratio of non-performing loans (NPLs) in Ireland, at 26 per cent. Photograph: Alan Betson

Permanent TSB has the highest ratio of non-performing loans (NPLs) in Ireland, at 26 per cent. Photograph: Alan Betson

Irish banks and firms that have bought non-performing loans in recent years are likely to turn to the bond markets to refinance so-called split mortgages, a key restructuring solution offered to troubled borrowers in the wake of the financial crisis, according to credit ratings firm DBRS.

The Irish Times reported last June that banks were weighing bond sales, known as residential mortgage-backed securitisation (RMBS) deals, to help lower their levels of non-performing loans (NPLs). However, they would have to structure any transactions off-balance sheet to move them off their books.

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