Deals round-up………………….

PRIVATE EQUITY

RBDC becomes non-conformist

Royal Bank Development Capital (RBDC) has backed the GBP510 million management buyout of Ocwen UK, a non-conforming UK mortgage lender, from its parent company, Ocwen Financial Corporation of the US. The deal includes the acquisition of a GBP700 million mortgage portfolio.

RBDC has invested GBP76 million of equity, with a further GBP1 million of equity being provided by Patron Capital and the management team. Barclays Capital, Greenwich NatWest and Morgan Stanley Dean Witter are providing Ocwen UK with debt facilities totalling GBP433 million. On completion, RBDC will own 49 per cent of Ocwen UK.

The Watford-based business is one of the UK market leaders within the non-conforming loan market, and currently services over GBP700 million of mortgages and has in excess of 45,000 customers. Typically, customers include the self-employed, individuals who buy to let, and property owners who need to raise a second mortgage.

“The non-conforming loan market is attractive, with significant growth opportunities given that there are currently 8.7 million adults in the UK unable to obtain credit from a mainstream lender,” says Duncan Johnson, assistant director at RBDC.