NewDay Funding, the UK consumer credit provider behind brands such as Aqua and Marbles, has completed a £380m issuance of asset-backed notes due in 2029. The transaction, which priced earlier this week, is backed by a pool of unsecured personal loans and credit card receivables originated by the lender.
The notes are structured with a senior tranche that attracted strong demand from institutional investors, reflecting a cautious but improving sentiment towards UK consumer credit. According to market sources, the deal was oversubscribed, allowing NewDay to tighten pricing from initial guidance.
Asset-backed securities (ABS) of this kind allow lenders to free up capital on their balance sheets, enabling them to continue originating new credit. For investors, the notes offer a yield pick-up over gilts, albeit with higher risk tied to consumer repayment behaviour. The Bank of England's recent data shows consumer credit growth has slowed but remains positive, with arrears rates still elevated but no longer accelerating.
Analysts noted that the successful pricing of the NewDay deal could pave the way for other non-bank lenders to tap the ABS market in the coming months. One structured finance analyst commented: 'Investors are becoming more selective, but well-structured deals with experienced originators are finding a ready market. This is a positive signal for the wider consumer finance sector.'
The notes are expected to be listed on the London Stock Exchange, providing UK institutional investors with a liquid asset class. The deal also underscores the importance of securitisation as a funding tool for specialist lenders who do not have access to retail deposits.