In what has been a quiet couple of weeks in the European securitization market, the only deal of note other than Landesbank Schleswig-Holstein synthetic transaction was the Bank of Scotland's residential mortgage deal (ASRI, 4/27/2000). Salomon Smith Barney acted as lead manager on the GBP750 million ($1.2 billion) transaction - Mound Financing No.1 - which was backed by over 23,000 U.K. mortgages originated by BoS, worth over GBP1.7 billion.
The deal was the first U.K. RMBS to employ a master trust structure, something more normally associated with U.S. credit card deals. The structure allows the bank to add mortgages to the pot, subject to approval from the rating agencies, and for it to issue more deals backed by the same trust in the future, reducing the cost of each deal. It also means that the bonds issued from the trust can boast maturities shorter than the lives of the mortgages in the pool.