BUZZ-UK buy-to-let lenders: Barclays sounds warning bell on Basel draft

** UK's "buy-to-let" (BTL) lenders smarting from a Barclays (Swiss: BARC.SW - news) downgrade, as heavyweight brokerage pulls focus to a cautious draft put forth by global banking regulators earlier this month

** The Basel Committee draft rules say banks across the world would have to set aside more capital to cover BTL mortgages and place greater emphasis on a borrower's ability to repay a home loan

** OneSavings, biggest YTD gainer among the downgraded names, is hardest hit, down c.7 pct, top faller on FTSE financial index and 2nd-top loser on London's FTSE 250 index

** Barclays (LSE: BARC.L - news) cuts rating to "equal weight" from "overweight" and TP to 340p from 375p, saying stock, which has gained 104 pct from an IPO price of 170p in June 2014, would see the biggest headwind

** 55 pct of OneSavings loan book stock and 80 pct of its originations derived from BTL mortgages, brokerage writes

** Barclays says that while some proposals may be watered down, some incremental capital against such mortgages is increasingly probable and could reduce future returns on equity

** Paragon Group of Companies down c. 3 pct and 3rd biggest loser on financial index after being moved to "equal weight" from "overweight", with its TP slashed to 375p from 475p

** Aldermore (TP cut to 225p from 310p) & Shawbrook (TP to 375p from 410p) down under 1 pct (RM (LSE: RM.L - news) : esha.vaish.thomsonreuters.com@reuters.net)