Norway gets SecReg green light
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The EU Securitisation Regulation was incorporated into the EEA Agreement on 12 June and it is widely expected that the rules will come into force in Norway on 1 January 2025. The regulation covers both true sale and synthetic securitisations, as well as rules on STS securitisations.
Legislative rules implementing the Securitisation Regulation in Norwegian law have already been adopted by the Norwegian Parliament, but the rules have not yet entered into force, according to law firm Wikborg Rein. The Ministry of Finance has announced that a proposal for legislative amendments will be submitted at the same time as the consent of the Norwegian Parliament is to be obtained for the incorporation of the regulations into Norwegian law, which is expected in the autumn.
As well as incorporating the regulation into Norwegian law, a number of legislative amendments have been adopted to adapt Norwegian law to the regulation, including exemption from license requirements for securitisation SPEs and exemption from the requirement for consent under the Financial Contracts Act when transferring loans to an SPE. Additionally, when a financial institution securitises a loan portfolio, the servicer must be a bank or other credit institution or a financing company.
Norway’s previous rules on securitisation were repealed in 2015, rendering securitisation practically impossible in the jurisdiction - among other reasons because an SPE is considered to be conducting financing activities, which is subject to licensing and capital requirements.
In other news…
UK renewables ABS debuts
Residential energy services provider Hometree has secured a £250m asset-backed debt facility from Barclays, representing the UK’s first residential renewables securitisation. The firm will use the facility to finance over 28,000 residential solar panel systems, batteries and heat pumps across the UK over the next two years. The move accelerates Hometree’s ambition to decarbonise over one million homes by 2030 and its plans to build Europe’s leading residential energy services business, combining hardware installation, financing, repairs and ongoing maintenance in one platform.
An estimated one-third of UK households are unable to afford renewable energy technology, while the full-scale decarbonisation of UK homes is projected to cost £250bn by 2050, according to the Climate Change Committee. Research from LCP Delta reveals that last year 43% of European solar customers bought a solar PV system on finance, but finance products specific to this market in Europe have historically been extremely limited.
The new Barclays facility is enabling Hometree to bring innovative financing products to the UK residential renewable market, including zero-deposit leases and loans with low interest rates, as well as attractive terms of up to 25 years, which are available for solar panels and battery systems, with heat pump options coming soon. Hometree expects to undertake the first UK residential renewables public market transaction within two years.
“Supporting fast-growing renewable energy clients like Hometree is a key part of Barclays’ strategy to facilitate US$1trn in green and sustainable finance by 2030. This innovative financial structure is the first of its kind in the UK and will enable our client Hometree to offer a more affordable way for UK homeowners to install solar panels and other renewable technologies. Retrofitting UK homes is an important part of making progress on the path to net zero,” comments Gordon Beck, head of European corporate & sustainable securitisation at Barclays.
Corinne Smith