Nationwide launches £3.5bn securitisation deal
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Nationwide has launched a £3.5bn issue of residential mortgage-backed securities in what is the second significant securitisation deal since the start of the financial crisis.
The UK’s biggest building society launched the issue on October 23 via a securitisation vehicle called Silverstone, and aims to close the issue on November 3.
The deal is backed by prime mortgage assets with an average LTV of approximately 65%.
It follows the widely heralded £4bn mortgage-backed bond issue from Lloyds Banking Group one month ago.
When news of the Lloyds Group deal first emerged it was lauded by some as a sign that the securitisation markets, which had been frozen since August 2008, had finally reopened.
Prior to the Lloyds deal the last time a similar securitisation deal had taken place was in August last year with a £400m issuance carried out by Alliance & Leicester.
But other commentators were more cautious, saying that although the issuance from Lloyds Group was encouraging it did not mark a revival of the RMBS markets.
Readers' comments (3)
David Richardson MCIBS ex Account Manager Scotland | 26 Oct 2009 11:49 am
Great News. Another sign that things may be starting to move again.
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Charles Bunbury | 26 Oct 2009 2:01 pm
Securitisation
There is nothing wrong with the concept of securitisation, the problem lies with investment bankers who purchase portfolio without checking quality and contents. Mortgage brokers and members of public who work on the principle that self certification and fast track means declare any income figure required to get a mortgage offer with no concern for the type product being placed or the possibility that payments will not be met should terms or market conditions dictate increase payments in the short, medium or long run.
We can do all the fact find, affordability and credit check in the world when placing a mortgage but if an individual does not have the financial discipline to reframe form taking on more borrowing within days/months or even years of starting a mortgage there is nothing we can do to stop them, this problem is made worst if income has not increased and they have no buffer or emergency funds.
I often wonder why FSA.GOV.UK is silent about the of consumer discipline to control their level of borrowing soon after starting a new mortgage or consolidation, they are big on TCF or is it easier to bully those of us who are doing the job correctly, in support of a consumer led economy on behalf of their master the chancellor and Gordon? These are the reason why we are in the current mess, good luck to any lender seeking to securities. In my book securitisation is based of the concept of reinsurance; if the portfolio is not checked don’t be surprise if risks are bad, in short full structural survey is a must not a valuation report.
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Paul Barber | 27 Oct 2009 12:52 pm
I think this is great news for the market. Hopefully more lenders will follow and make available more products as a result.
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