Permanent Tsb Group Holdings PLC · EURONEXT:PTSB
Permanent Tsb — Irish Life & Permanent — Debt Investor Presentation (June 2006)
58 slides from Permanent Tsb's debt investor presentation, June 2006
Slide 1: Important Notice
Important Notice NOT FOR DISTRIBUTION TO ANY U.S. PERSON OR TO ANY PERSON OR ADDRESS IN THE U.S. IMPORTANT: You must read the following before continuing. The following applies to the investor presentation following this page, and you are therefore advised to read this carefully before reading, acce
Slide 2: Fastnet Securities 2 Plc: Securitisation of Prime Irish Residential Mortgage Loans
Fastnet Securities 2 Plc (“Fastnet 2”) Securitisation of Prime Irish Residential Mortgage Loans June 2006
Slide 3: Disclaimer
Disclaimer The securities discussed herein have not been and will not be registered under the United States Securities Act of 1933, as amended (the “Securities Act”). Such securities may not be offered or sold, pledged or otherwise transferred, directly or indirectly, and this document may not be di
Slide 4: Agenda
Agenda 1. Deal Summary 2. Irish Life & Permanent 3. Irish Residential Mortgage Market Overview 4. IL&P’s Residential Mortgage Business 5. Fastnet 2 – Residential Mortgage Pool 6. Credit Structure & Terms 7. Conclusion Appendix
Slide 5: 1. Deal Summary
Life ¢ Permanent 1. Deal Summary aa citigroup) 7 SOCIETE GENERALE corporate and Deutsche Bank Corporate & Investment Banking investment banking
Slide 6: Fastnet 2
Fastnet 2 Irish Life & Permanent (“IL&P”) is one of the largest mortgage providers in Ireland with € 19.3bn of prime residential mortgages under management as at December 2005 Fastnet 2 will be the second issuance from IL&P’s Irish mortgage pool. IL&P has to date executed five securitisation transac
Slide 7: Indicative Capital Structure
Indicative Capital Structure Expected Initial Rating % of Expected Step-up Legal Principal Credit Target Scheduled Class Capital WAL(2) (S&P / Amount Enhancement (1) Amortisation Maturity Date Final Structure (years) Moody’s) (millions) A1 [AAA/Aaa] € [344] [16.00]% [8.48]% [Pass through] [1.00] [Ju
Slide 8: The Provisional Mortgage Pool
The Provisional Mortgage Pool Fastnet 2 – Key Portfolio Statistics (as at 13 April 2006) Total Number of Borrowers [27,840] Total Number of Advances [27,872] Aggregate Current Balances € [4,357,866,699.53] Average Current Balance € [156,352.85] Weighted Average LTV [73.17]% Weighted Average Indexed
Slide 9: Timetable
Timetable Announcement [1 June 2006] Roadshow Week of [5] June 2006 Expected Pricing Week of [19] June 2006 Expected Closing Week of [26] June 2006 7
Slide 10: 2. Irish Life & Permanent
lisp Life é Permanent 2. lrish Life & Permanent aa citigroup) 7 SOCIETE GENERALE corporate and Deutsche Bank Corporate & Investment Banking investment banking
Slide 11: Profile of the Group
Profile of the Group Irish Life & Permanent plc (the “Group”) was created by the merger of Irish Life plc and Irish Permanent plc in 1999 Irish Permanent plc dated back to 1884 when Irish Temperance Permanent Benefit Building Society was established in Ireland. The company was publicly quoted in 199
Slide 12: Group Structure – Legal
Group Structure – Legal Quoted Company + Bank t/a Irish Life & Permanent plc permanent tsb Irish Life plc 30% Irish Life Irish Life Allianz permanent tsb Capital Home Investment Assurance plc Irish Life plc Finance Loans Ltd (UK) Managers Ltd Principal General Life Insurance Company Associate Source
Slide 13: Group Structure – Operational
Group Structure – Operational Irish Life & Permanent Group 100% 100% 30% Irish Life permanent tsb Allianz PTSB Retail Corporate ILIM(1) PTSB CHL(2) Allianz-Irish Life Finance Individual Group life & Fund Mortgages, Auto & Niche General life, pensions, pensions via management. car finance, Consumer m
Slide 14: Life Business – Irish Life Assurance
Life Business – Irish Life Assurance Ireland’s largest Life & Pensions company with market share of over 25% Assets of €25bn and new business generation of €520m (APE) / €3.9bn (PVNBP) Broadest distribution reach in market with multi-channel distribution strategy 9% 34% 28% 29% Institutions Brokers
Slide 15: Banking Business
Banking Business A leading bank in Ireland focused on the personal sector, loan portfolio of €26bn Leading positions in residential mortgage market with approximately 20% market share Leading provider of new car finance with dealer relationship accounting for 25-30% of market Multi-channel distribut
Slide 16: Risk Profile & Capital Strength
Risk Profile & Capital Strength Life & Pensions • 85% of business unit-linked – investment risk with policyholders • 15% non-linked liabilities fully-matched Solvency capital invested primarily in cash (80%+) • Minimum EU Solvency capital covered 1.7 times • All Tier 1 capital, zero leverage Banking
Slide 17: Funding Strategy
Funding Strategy IL&P is committed to: Funding Profile December 2005 • Increasing wholesale funding over the last decade Short Term Debt Long Term Debt 18% 33% • Comprehensive funding programme to support growth in lending operations Commercial • Diversifying funding sources Deposits 20% • Balancing
Slide 18: Securitisation Programme
Securitisation Programme IL&P as a group is a popular RMBS issuer. To Capital Home Loans (UK) date the Group has completed six transactions Original Issue O/S Bal Maturity Fastnet 1 experienced no gross losses(1) and Issue Amount Amount O/S Bal Maturity Auburn 1 £400mn £0 Aug 2005 was called as expe
Slide 19: 3. Irish Residential Mortgage Market Overview
3. Irish Residential Mortgage Market Overview
Slide 20: Irish Economic Performance
Irish Economic Performance GDP Growth 1997–2005 Annual Average % Euro Area 2.1 UK 2.8 Ireland 7.3 Source: OECD Employment Growth - Ireland 1997–2005 1997 2005 Change Private Domestically Oriented 759 1,157 399 Public Services 276 420 144 Industry & Agriculture 433 403 -30 Total at work 1,468 1,981 5
Slide 21: Irish Economic Forecasts
Irish Economic Forecasts Consensus Forecast Growth 2005 2006 2007 % % % GDP Euro Area 1.4 2.1 1.8 UK 1.7 2.3 2.5 Ireland 4.7 4.8 4.5 Source: Consensus Economics, May 2006 Ireland Employment Growth 4.6 3.5 3.2 Consumer Spending Growth 5.6 6.4 6.4 “Economy has potential to grow at between 4–5% a year
Slide 22: Demographics – Baby Boom Generation
Demographics – Baby Boom Generation 90-94 80-84 70-74 60-64 Key house – 50-54 buying age Age 40-44 30-34 20-24 10-14 0-4 0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 Baby Boomers coming of age. Source: ESRI 18
Slide 23: Projected Labour Force
Projected Labour Force 8% of workforce are Non Nationals Non Nationals widely dispersed throughout the economy • 21% Hotel and Catering • 11% Manufacturing • 9% Construction • 8% Health Inward migration (net) flow rate to continue at circa 50,000 per annum Source: IL&P. 19
Slide 24: Active Population (Ireland vs. the EU)
Active Population (Ireland vs. the EU) 320,000 4,000 300,000 3,600 280,000 Figuers in 000s Figuers in 000s 3,200 260,000 2,800 240,000 2,400 220,000 200,000 2,000 2005 2010 2015 2020 2025 2030 EU-25 Ireland (rhs) Source: NCB 20
Slide 25: Housing Demand & Supply
Housing Demand & Supply 90 90 Over 25 Completions (rhs) 80 80 70 70 60 60 50 50 000s 000s 40 40 30 30 20 20 10 10 0 0 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019 The acceleration in the population in Ireland aged over 25 was the basis of the housing boom sinc
Slide 26: Housing Demand & Supply (cont’d)
Housing Demand & Supply (cont’d) Strong demand and low interest rates Regional House Prices – Growth since 1996 have resulted in significant property price 325% 319% inflation 300% 274% 267% Problem most acute in Dublin where 275% 255% supply still does not satisfy demand 250% 238% 230% 219% 225% 21
Slide 27: New Residential Mortgage Lending
New Residential Mortgage Lending 35 33.3 30 26.5 25 20 20 € bn 15 12.1 9.1 9.7 10 7.3 5.1 5 0 1998 1999 2000 2001 2002 2003 2004 2005 2005 new business at €33 billion – up 28%. Source: IL&P. 23
Slide 28: Mortgage Affordability
Mortgage Affordability Repayments on a 90% Mortgage as a Percentage of Household Disposable Income 50% 45% 40% 35% 30% 25% 20% 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006e Falling interest rates and rising incomes since the late 1990s helped cushion the impact on
Slide 29: 4. IL&P’s Residential Mortgage Business
4. IL&P’s Residential Mortgage Business
Slide 30: Strategy & Market Share
Strategy & Market Share Key objective – to retain leading position in Irish mortgage market with market share of to over 20% No.1 brand in market supported by strong marketing and competitive pricing Traditionally focused on mass market but increasing focus on first time buyers, professional investo
Slide 31: IL&P’s Award
IL&P’s Award Source: IL&P. 26
Slide 32: Product Range and Features
Product Range and Features IL&P’s product range includes Home, Residential Investment & Equity Release loans • Variable rate loans – “Tracker” – based on ECB plus a margin – “Standard Variable Rate” (“SVR”) • Fixed Rate loans that revert to variable after a certain period Flexible features of IL&P m
Slide 33: Product Pricing & Margins
Product Pricing & Margins Pricing strategy has been to be in top competitive quartile for new business rates Maximum new business discount of 1% for one year and roll off into standard variable rate Re-priced SVR book in Q1 2006 following ECB rate rises and eliminated 20bps of differential to suppor
Slide 34: New Mortgage Lending – LTVs
New Mortgage Lending – LTVs New Mortgage Lending – Ireland – LTVs % values 2003 2004 2005 % % % Average LTV First Time Buyers 81 81 84 Second Time Buyers 58 60 61 Average 67 68 69 LTV Ranges < 75% 49 48 43 76-89% 15 16 20 90-100% 36 36 37 Source: IL&P. 29
Slide 35: Distribution Channels
Distribution Channels Multi-Channel Distribution Branch 104 branches Network Selectively adding new locations Agencies & 55 agencies, usually estate agents Franchisees Variable cost distribution in small populated areas Voted “Best Mortgage Provider” 2003, 2004 and 2005 by PIBA (Brokers Association)
Slide 36: Underwriting: Key Criteria
Underwriting: Key Criteria Loan characteristics • Maximum Loan to Value (LTV) ratios – 100% for First Time Buyers (from August 2005) – 92% for non-FTBs • Maximum term of 35 years See Property Valuation Appendix • Valuation report from bank appointed valuer • Strict criteria for appointment to Valuer
Slide 37: Underwriting: Credit Scoring
Underwriting: Credit Scoring All residential mortgages are credit scored (since 1998) using statistical based scorecard developed with Experian-Scorex UK. In 2005 IL&P implemented a suite of Basel II compliant scorecards decision categories: • “Super Accept”: better than average risk profile. Additi
Slide 38: Underwriting: Retail Network
Underwriting: Retail Network Branch Managers discretions range from €200,000 to €500,000 based on: • Experience • Credit quality reviews • Arrears trends Branch Managers and Assistant Managers typically have 5–10 years of experience Mortgage facilities in excess of usual discretions are submitted to
Slide 39: Underwriting: Intermediaries
Underwriting: Intermediaries Intermediary underwriters’ discretions range from €250,000 to €500,000 Typical experience levels range from 2 – 7 years Team of “mobile” underwriters who work from large intermediaries offices Mortgage facilities in excess of discretions are approved by senior underwrite
Slide 40: Arrears Process
Arrears Process Late Payments Two automated letters upon late payment: - First letter after four days - Second letter after 14 days Queue to OCS Accounts queue to the Online Collection System (OCS) when 22 days past due Immediate Communication More than one month arrears: Collectors or Outside Agenc
Slide 41: Management Teams
Management Teams Collections Department Arrears Team Pre-legal Team Legal Team Properties in Possession Team Source: IL&P. 36
Slide 42: Arrears Performance
Arrears Performance Current arrears balance (whole mortgage book) are: • Three months or greater: [0.14] % (as at March 2006) • 12 months or greater: [0.11] % (as at March 2006) While IL&P’s mortgage portfolio continues to grow year by year, mortgage arrears remained low. This reflects IL&P’s string
Slide 43: 5. Fastnet 2 – Residential Mortgage Pool
5. Fastnet 2 – Residential Mortgage Pool
Slide 44: The Provisional Mortgage Pool
The Provisional Mortgage Pool Fastnet 2 – Key Portfolio Statistics (as at 13 April 2006) Total Number of Borrowers [27,840] Total Number of Advances [27,872] Aggregate Current Balances € [4,357,866,699.53] Average Current Balance € [156,352.85] Weighted Average LTV [73.17]% Weighted Average Indexed
Slide 45: Geographic Distribution
Geographic Distribution Geographic Concentration by Value Balanced geographic distribution No mortgages in Northern Ireland Donegal Louth NORTHERN [5.38]% F Leeitri Fererma L IRELAND itr m ma na im nagh MMo Meath Mayo Silgo gh onnag Mayo Silgo ag han [6.50]% C ha Caava n van R Ro os d n Dublin sccom
Slide 46: Loan Characteristics
40 Percent of Pool Percent of Pool 0% 5% 10% 15% 20% 25% 0% 5% 10% 15% 20% 20,000 or less up to 3 mths 20,001 to 40,000 over 3 40,001 to 60,000 to 6 60,001 to 80,000 Source: Fastnet Securities 2 plc Preliminary Prospectus over 6 80,001 to 100,000 to 9 100,001 to 120,000 over 9 to 12 120,001 to 140,0
Slide 47: Loan Characteristics (cont’d)
Loan Characteristics (cont’d) Current Loan to Value (Weighted by Current Balance) 25% Percent of Pool 20% 15% 10% 5% 0% Up to to 40% to 50% to 60% to 70% to 80% to 90% to 95% 95.1% 30% 30.1% 40.1% 50.1% 60.1% 70.1% 80.1% 90.1% 100% to LTV Range Current Indexed(1) Loan to Value (Weighted by Current B
Slide 48: 6. Credit Structure & Terms
lisp Life é Permanent 6. Credit Structure & Terms aa citigroup) 7 SOCIETE GENERALE corporate and Deutsche Bank Corporate & Investment Banking investment banking
Slide 49: Fastnet 2 Structure
Fastnet 2 Structure IL&P (“Basis Rate IL&P Swap (“Servicer”) Counterparty”) Class A1 Notes Purchase Class A2 Notes Price Proceeds Irish Life & of the Collections Permanent Fastnet issue Borrowers Class B Notes Securities 2 Plc ("Originator" ("Issuer") and "Seller") Sale of Class C Notes Mortgage Por
Slide 50: Fastnet 2 – Structural Features
Fastnet 2 – Structural Features Excess spread is estimated to be [0.40]% at closing Cash Reserve will be € [32.25] million (or [1.5]% of the original principal balance of the notes) at closing Credit Enhancement and will remain at such level for the remaining life of the transaction Credit Enhanceme
Slide 51: Fastnet 2 – Structural Features (cont’d)
Fastnet 2 – Structural Features (cont’d) Revenue Priority of Payments Payments to the Trustee Other Senior expenses Payments to the Paying Agent, Agent Bank, Mortgage Manager (if the Mortgage Manager is not IL&P) 0.15% to ILP while they are the Mortgage Manager Payments to Swap Counterparty (other t
Slide 52: Fastnet 2 – Structural Features (cont’d)
Fastnet 2 – Structural Features (cont’d) If the CPR is higher than the assumed [10]% under the scheduled amortisation of the notes, New Loans New Loans and Further can be substituted in. IL&P may also make Further Advances to existing borrowers. However, the sale Advances of any Further Advances or
Slide 53: Summary of Indicative Transaction Terms
Summary of Indicative Transaction Terms Issuer: Fastnet Securities 2 plc Originator and Servicer: Irish Life & Permanent plc (A1/P-1 by Moody’s and A+/A-1 by S&P) Security / Note Trustee: Citigroup Trustees Limited Principal Paying Agent Citibank, N.A. Basis Swap Counterparty Irish Life & Permanent
Slide 54: 7. Conclusion
Life ¢ Permanent 7. Conclusion aa citigroup) 7 SOCIETE GENERALE corporate and Deutsche Bank Corporate & Investment Banking investment banking
Slide 55: Key Investment Considerations
Key Investment Considerations IL&P is the market leader in the retail financial services market in Ireland Strong Strong Originator Originator Long term ratings of A+/A1 (S&P/Moody’s) Irish mortgage market share of around 20% The underlying collateral consists of a pool of first-ranking prime reside
Slide 56: Appendix
Life ¢ Permanent Appendix aa citigroup) 7 SOCIETE GENERALE corporate and Deutsche Bank Corporate & Investment Banking investment banking
Slide 57: Valuations & Valuers Panel
Valuations & Valuers Panel General Principles: • A valuation report forms part of the basic requirements under the Credit Policy for each mortgage proposal • A permanent tsb(1) valuation report must be completed by a bank appointed valuer and in accordance with the Contractual Agreement that is in p
Slide 58: Substitution Criteria
Substitution Criteria Substitution criteria applicable to New Loans and Further Advances include, among others: No material breach of the conditions of the mortgage loans and all mortgages are legal and valid No deficiency has been recorded on the PDL Further Advance, origination procedures and Lend
Irish Life & Permanent — Debt Investor Presentation (June 2006) on 6ix