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A&L unveils RMBS deal worth £1bn

Alliance & Leicester has launched a residential mortgage-backed securi-tisation worth £1bn.

The deal is backed by prime UK mortgages originated by Santander-owned A&L with an average LTV thought to be in the region of 52%, in line with the average LTV of Santander’s mortgage book.

This is the first public RMBS deal from A&L since 2007. A&L launched a securitisation worth £400m in August 2008 but the notes from this were sold to two undisclosed large investors.

This is the fourth issue from the lender’s Fosse Master Trust securitisation vehicle, according to ratings agency Moody’s.

There is no investor put option on the deal, a feature which allows the lender to buy bonds back from investors at a later date.

The move follows a £2.5bn securitisation from The Co-operative Bank last month, backed by mortgages from its subsidiary Britannia Building Society.

Lloyds Banking Group also un-veiled a securitisation deal worth £2.5bn in January.

Mehrdad Yousefi, industry con-sultant and former head of inter-mediary mortgages at A&L, says: “The issuances we have seen in the past two months are a small step in the right direction.”

But he also notes evidence given by Mervyn King, governor of the Bank of England, to the Treasury Committee recently. King told MPs that the securitisation market is still far from healthy.

A spokeswoman for the Council of Mortgage Lenders says: “It’s encouraging to see another successful securitisation going through.

“But there’s still a long way to go before the wholesale market can fill the gap and we have enough fun-ding to match the long-term demand from consumers.”


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