Nedbank Group · JSE:NED
Nedbank — Debt Investor Presentation (November 2007)
29 slides from Nedbank's debt investor presentation, November 2007
Slide 1: Nedbank's RMBS Programme Series 1
Nedbank’s RMBS Programme Series 1 November 2007 DEBT CAPITAL MARKETS
Slide 2: Table of Contents
Table of Contents Table of Contents........................................................................................................................................................................................................................................................... 2 Executive S
Slide 3: Executive Summary and Key Selling Points
Executive Summary and Key Selling Points • Securitisation forms part of Nedbank’s funding strategy and is driven by the bank’s Group ALCO & Executive Risk Committee. • GreenHouse Funding (Pty) Limited (“GreenHouse”), Nedbank’s inaugural home loan securitisation transaction, is a Segregated Series Me
Slide 4: Transaction Summary
Transaction Summary Comparison Note Summary Tranche Tranche Size Scheduled Indicative Loan Portfolio Summary GreenHouse Series 1 HOMES 1 Blue Granite 4 Ikhaya2 Class Ratings Legal Maturity Step-up Size (R’M) Maturity Spread Class A1* AAA(zaf)/AAA.za [20.00]% [●] Nov 2012 Nov 2039 25bps 15bps Number
Slide 5: Funding Developments and Nedbank's Funding Strategy
Funding Developments and Nedbank’s Funding Strategy Liquidity developments Nedbank funding strategy overview • SA Banks have experienced high asset growth in the recent years • Carry liquidity surpluses, housed within genuine ‘liquefiable assets’ • Continuing upside risk to interest rates in the sho
Slide 6: Nedbank Home Loans - Introduction
Nedbank Home Loans - Introduction • The Nedbank Home Loans monoline was formed in early 2005 as a division of Retail Banking Services Nedbank Retail • On formation of the monoline a new management team was appointed and Nedbank has since shown healthy home loan growth, with total market share of 16.
Slide 7: Nedbank Home Loans - Market Share
Nedbank Home Loans - Market Share Management • Introduction of new management team Nedbank book growth (year-on-year) (LHS) Nedbank market share (RHS) • Formation of monoline structure 40% 20% IMPROVEMENT IN MARKET SHARE Structure • Clear product, segment and channel responsibilities within Nedbank
Slide 8: Nedbank Home Loans - Distribution Channels and Origination Statistics
Nedbank Home Loans - Distribution Channels and Origination Statistics Nedbank Home Loan Intermediary Source Channels External Channels Internal Channels Mortgage Originators Direct Non-Affiliated Estate Agents Nedbank Branches & & & Other Intermediaries Developers Distribution Channels Contribution
Slide 9: Nedbank Home Loans - Credit Structure and Credit Assessment Process
Nedbank Home Loans - Credit Structure and Credit Assessment Process L ow R isk H ig h R isk C R E D IT AP P R O V A L P R O C E S S GROUP Group Credit Committee N G R 12 N G R 14 N G R 16 N G R 18 N G R 20 N G R 22 N G R 24 N G R 13 N G R 15 N G R 17 N G R 19 N G R 21 N G R 23 N G R 25 • ID n u m b
Slide 10: Nedbank Home Loans - Collections System and Process
Nedbank Home Loans - Collections System and Process DEBT MANAGER* Successful introduction of an internationally recognised, automated end-to-end collections workflow system in November 2006, replacing the less sophisticated system that was internally developed in conjunction with Experian. Benefits
Slide 11: Historical Performance of Home Loan Book
Historical Performance of Home Loan Book DI 500 Credit Risk Indicators Total Arrears The Proportion of M ortgage s Outs tanding that have be e n in de fault for 3 m onths or m ore 18.00% 12% Prime (RHS) Nedbank Group 16.00% 10% 14.00% 8% 12.00% 6% 10.00% 4% 2% 8.00% 0% 6.00% Jan-02 Jul-02 Oct-02 Jan
Slide 12: The National Credit Act (NCA)
The National Credit Act (NCA) IMPACT ANALYSIS OF THE NCA ON NEDBANK HOME LOANS Pre-NCA Implementation Post-NCA Implementation Only contractual obligations considered for affordability purposes, Contractual as well retail and other obligations considered for Credit granting process subject to RTI rul
Slide 13: Current Market Conditions
Current Market Conditions Rising interest rates • Interest rates have risen by 3.5% in the period June 2006 to October 2007. Notwithstanding the lag impact of the latest hikes, the risk remains that further hikes will be necessary in order for the government’s inflation targeting objectives to be me
Slide 14: GreenHouse Funding Series 1
GreenHouse Funding Series 1 Structure Diagram Parties Issuer Security SPV Issuer GreenHouse Funding (Pty) Limited Series 1 Owner Trust Owner Trust Originator, Seller Nedbank Retail: Home Loans and Servicer 100% 100% Arranger, Administrator Nedbank Capital and Dealer Series 1 Liquidity and Redraw Cal
Slide 15: Salient Structural Features
Salient Structural Features Arrears Reserve • Should the aggregate Principal Balance of Home Loans in respect of which there are greater than 3 instalments in arrears exceed 1% of Principal Balance of the Home Loan Pool, the Issuer will trap funds in an Arrears Reserve to provide additional credit e
Slide 16: Interest Deferral, Liquidity and Redraws
Interest Deferral • Interest on subordinated Notes is deferred in accordance with the size of the Principal Deficiency recorded • Interest gets deferred in a reverse sequential order, thus providing structural protection for senior Noteholders Liquidity • Liquidity Shortfalls (i.e. items 1-6 in Pre-
Slide 17: Indicative Terms and Capital Structure
Indicative Terms and Capital Structure Capital structure Terms of the notes Simplified Pre-Enforcement Priority of Payments Tranching Class A1 Class A2 Class B Class C Class D Senior Fees and Expenses up to Issuer Expense Cap Class A1 [20,0]% Size (%) [20,0%] [64,9%] [4,9%] [3,8%] [1,95%] Senior Ser
Slide 18: Home Loan Pool
Home Loan Pool Pool Summary (Pool Cut as at 18 September 2007) Eligibility Criteria Aggregate Current Balance 3,192,842,968.78 • Type: Home Loans in respect of residential property – including freehold and sectional title, but excluding vacant Average Current Balance 422,389.60 Min Current Balance 5
Slide 19: Home Loan Pool – Composition
Home Loan Pool – Composition Payment to Income Current Loan to Value Ratio 2,000 35.00% 1,200,000,000 40.00% 1,800 Loan Balance (R) 35.00% 30.00% 1,000,000,000 Number of Home Loans 1,600 Number of Loans (%) 30.00% Proportion of Total Number (%) 1,400 25.00% 800,000,000 Proportion of Total A mount (%
Slide 20: Transaction Timetable and Contacts
Transaction Timetable Roadshow: 8 – 15 November 2007 Bookbuild: [26] November 2007 Time: 09:00 – 11:00 Bookbuild Policy: [Hybrid Feedback/Dutch Auction] MPC: 6 December 2007 Settlement (T+10): 10 December 2007 First Interest Reset Date: 18 February 2008 Contacts Nedbank Retail: Home Loans Group ALM
Slide 21: Conclusion
Conclusion GreenHouse Funding is a new entry in the SA RMBS market and offers investors: • A high quality and diverse asset pool of prime home loans with low LTV’s and PTI’s; • A simple and robust legal and capital structure, with dual ratings on the Notes; • Structured, originated and serviced by o
Slide 22: Appendix A – Home Loan Pool Statistics
Appendix A – Home Loan Pool Statistics Outstanding Balance Single or Joint Bond Number of Home Proportion of Total Aggregate Drawn Balance of Proportion of Total Home Loan (R) Loans Number (%) Home Loans (R) Amount (%) Number of Home Proportion of Total Aggregate Drawn Balance of Proportion of Total
Slide 23: Loan Origination Channel and Individual Score Rating
Loan Origination Channel Individual Score Rating from Experian or ITC Number of Home Proportion of Total Aggregate Drawn Balance of Proportion of Total Number of Home Proportion of Total Aggregate Drawn Balance of Proportion of Total Channel Loans Number (%) Home Loans (R) Amount (%) Score Level Loa
Slide 24: Original and Current Loan to Value Ratio
Original Loan to Value Ratio Current Loan to Value Ratio Number of Home Proportion of Total Aggregate Drawn Balance of Proportion of Total Number of Home Proportion of Total Aggregate Drawn Balance of Proportion of Total LTV (%) Loans Number (%) Home Loans (R) Amount (%) LTV (%) Loans Number (%) Hom
Slide 25: Owner Employment Status and Borrowers Age
Owner Employment Status Borrowers Age Number of Home Proportion of Total Aggregate Drawn Balance of Proportion of Total Number of Home Proportion of Total Aggregate Drawn Balance of Proportion of Total PTI (%) Loans Number (%) Home Loans (R) Amount (%) Age bracket Loans Number (%) Home Loans (R) Amo
Slide 26: Seasoning Since Inception and Recent Grant Date
Seasoning Since Inception Seasoning Since Recent Grant Date Number of Home Proportion of Total Aggregate Drawn Balance of Proportion of Total Number of Home Proportion of Total Aggregate Drawn Balance of Proportion of Total Number of Months Loans Number (%) Home Loans (R) Amount (%) Number of Months
Slide 27: Billing Method and Distribution of Home Loan Size
Billing Method Distribution of Home Loan Size Number of Home Proportion of Total Proportion of Total Number of Home Proportion of Total Aggregate Drawn Balance of Proportion of Total Original Bond (R) Loans Number (%) Aggregate Bond Amount (R) Amount (%) Region Loans Number (%) Home Loans (R) Amount
Slide 28: GreenHouse Funding Series 1 – R10 Billion Segregated Programme
GreenHouse Funding Series 1 – R10 Billion Segregated Programme Security SPV Issuer Owner Trust Owner Trust 100% 100% 100% Series 1 Future Series Security SPV Security SPV Series 1 Indemnity Secured by Series 1 Series 1 Series Assets Guarantees Guarantees GreenHouse Funding Series 1 Monthly Future Se
Slide 29: Disclaimer
Disclaimer • This information is highly confidential and is being delivered to a limited number of sophisticated prospective investors in order to assist them in determining whether they have an interest in the type of securities and derivatives described herein and is solely for their internal use.
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