The U.K.'s third structured covered bond issue came out last week, while the roster continues to grow. The new product will continue to work side by side with the country's RMBS deals, sources said.

Northern Rock and Bradford & Bingley followed HBOS' inaugural structured covered bond program, which has to date launched three issues. According to market sources, Northern Rock's inaugural issue was upsized to 2 billion (US$2.4 billion) from 1.5 billion (US$1.8 billion) after bids reached 3.5 billion (US$4.23 billion). The deal priced at the tighter end of initial talk, said sources. According to market reports, about 44% of the deal was allocated to German investors - signalling a growing comfort with the U.K. market since the structure's inception last year.

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