Demystifying Credit: Bridging Loans in European RMBS

In this instalment of Demystifying Credit, we delve into the use of bridging loans in European residential property lending and tackle following questions:

-- What is a bridging loan?
-- Why bridge financing exists, and how does it operate?
-- How are bridging loans different from traditional residential mortgages?
-- What are recent developments in bridging loan residential mortgage-backed security (RMBS) transactions in Europe and the UK?
-- What are the unique traits of bridging loan contracts, and what is their influence on credit considerations?
-- What are our key analytical considerations in rating RMBS transactions with exposure to bridging loans?