Lloyds issues £4.5Bn of RMBS - 02.10.2009

Author: David Whittaker Posted on: 05 October 2009

Under the current issue, one tranche of £1.65bn has already been placed with an investor, with a further two tranches available.

One sterling tranche of £1.65bn has a price of three-month LIBOR rate plus 0.17% while another euro-denominated tranche of £750m comes with a price tag of three-month Euribor plus 0.17%.

Robert Plehn, head of structured securitisation at Lloyds group, says: "We are extremely pleased with the market's reaction to our first publicly-distributed RMBS issue of the year.

"It is important to note that this offer was significantly oversubscribed, underlining the high asset quality of the deal and the strength of the brand name of our Permanent programme."

He adds: "The success of this issue widens the funding options available to the group, while we believe we have also taken a step towards helping reopen the European securitisation market."

Whilst these terms are quite tough it is the significance of the milestone that this represents which will encourage more activity in the coming months. Simply put, investors will now buy - the question is at what rate the terms will start to improve from the lenders perspective encouraging them to liquidate existing mortgage assets and then launch new origination programmes.

Watch this space !!!

Author: David Whittaker