Santander UK boosts RMBS deal to £1.4bn
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Investor demand has pushed a securitisation deal from Santander UK initially targeted at £1bn to in excess of £1.4bn.
The residential mortgage-backed securities deal, backed by mortgages from subsidiary Alliance & Leicester, has been dubbed by Santander as “the first true UK RMBS transaction since 2007.”
The deal was built through traditional book-building and investor roadshows in the UK and Europe and closed with over 40 accounts across 12 countries participating in the transaction.
It has been issued through the lender’s Fosse securitisation vehicle and is made up of three AAA-rated tranches.
It involves a £205m floating rate note tranche with a term of five years priced at three-month LIBOR plus 1.2%, a €775m floating rate note tranche with a five-year term priced at three-month Euribor plus 1.2%, and a £525m fixed bond with a seven-year priced at mid-swaps plus 1.2%.
A spokesman for Santander UK says: “This deal represents a significant positive step for European RMBS because, unlike competitor deals recently announced, the Fosse securitisation does not include an investor put back to the sponsoring bank, making this a true securitisation transaction.
“This demonstrates the quality of the programme, the underlying collateral and confidence the market has with Santander UK.
“The feedback from investors was incredibly positive resulting in us increasing the size of the transaction by over 40%.”
Santander’s securitisation deal follows a £2.5bn securitisation from The Co-operative Bank last month, backed by mortgages from subsidiary Britannia.
Lloyds Banking Group also unveiled a securitisation deal worth £2.5bn in January.
Both deals included an investor put-option which allows the lender to buy back bonds later in the term.
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