Santander UK launched what it called in a statement e-mailed to HousingWire “the first true UK residential mortgage-backed securitization (RMBS) since 2007.” The transaction is composed of mortgages originated by Alliance & Leicester, a wholly-owned subsidiary of Banco Santander. The deal does not contain a put-option, a first in this year’s UK RMBS, where note owners have certain rights to sell, within a certain time frame. The deal finished investor road-shows in the UK and Europe this week. While it was originally targeted at £1bn (US$1.5bn), investor demand pushed the final size of the transaction beyond £1.4bn (US$2.1bn). “The feedback from investors was incredibly positive resulting in us increasing the size of the transaction by over 40%,” a Santander spokesperson said in an e-mailed statement. “Following an extensive roadshow in the UK and continental Europe, over 40 good quality real money investors across 12 jurisdictions participated in the transaction.” The deal will issue through Fosse Master Trust, in three triple-A RMBS tranches. The £205m 5-year floating notes priced at plus 120bps. The €775m (US$1bn) 5-year floating class priced at plus 120bps. The £525m 7-year fixed class priced at plus 120bps. “This deal represents a significant positive step for European RMBS because, unlike competitor deals recently announced, the Fosse securitization does not include an investor put back to the sponsoring bank, making this a true securitization transaction,” the spokesperson said. The Fosse 2010-1 RMBS is the latest effort to get the securitization market machine rolling again in Western banking, despite recent hiccups in the credit markets. Lloyds Banking Group in February said it priced its first RMBS issue of 2010. Strong demand from US investors drove the upsizing of the US dollar tranche from $500m to $1bn. On the other hand, the second deal, called Silk Road Finance, the first securitization sponsored by the Co?operative Bank received weak investor interest. Yet, despite all of the activity in the UK RMBS segment, US issuance remains quiet. Write to Diana Golobay.