Lloyds mulls second RMBS issue, say reports

30 October 2009 | By Natalie Holt

Sources have told Reuters that another UK prime RMBS deal could be on the cards following the issue through its Permanent securitisation vehicle in September.

The bank is said to be considering using its Arkle mastertrust, which is backed by Lloyds TSB mortgages, to launch its second securitisation.

The September deal was lauded by some commentators as the start of a revival in using securitisation to fund new mortgages.

The market for RMBS assets had effectively been shut until the Lloyds Group deal, the first RMBS issue since August 2008.

A spokeswoman for Lloyds Group said the reports of a new issue were based on market speculation, which the bank does not comment on.

Lloyds Group is also considering approaching investors for up to £15bn via a rights issue.

The capital raising would help the bank raise enough capital to sidestep participation in the Government Asset Protection Scheme.

Rumours of a second Lloyds Group RMBS issue have surfaced just three days after Nationwide launched its own £3.5bn UK RMBS issue.

Nationwide’s issue was received well by investors with the issue being subscribed more than twice over.

It is set to formally close on November 3.