Strong US Demand Sweetens Pricing of $4bn UK RMBS
Lloyds Banking Group confirmed to HousingWire Monday the news of a mortgage securities issuance that buzzed in the industry over the weekend. Lloyds on Friday priced its first residential mortgage-backed securitization (RMBS) issue of 2010. The RMBS, backed by UK prime residential mortgages originated and serviced by Bank of Scotland under the Halifax brand, is worth £2.5bn (US$4bn). The deal includes sterling, euro and dollar tranches. Strong demand from US investors drove the upsizing of the US dollar tranche from $500m to $1bn. The RMBS deal oversubscribed with investments from 72 investors in 15 countries, with nearly 30% of the notes going to US investors. “We are delighted with the success of our latest RMBS issuance which saw great domestic, European and US demand," said Lloyds head of structured securitization, Robert Plehn, in an e-mailed statement. "This represents another step forward in the re-opening of the market, especially given the strong participation of investors from the US, a region that has not been tapped by European issue since 2007.” The first Lloyds deal of 2010 comes after the September 2009 residential MBS issuance, worth £4bn, was also over-subscribed by investors. Write to Diana Golobay.