A solid pipeline of subprime U.K. RMBS began marketing last week, offering investors approximately GBP2.1 billion (US$3.9 billion) of paper, which were all expected to price by Friday. Last year, tighter liability spreads led to decreased wrapped subprime RMBS volume, a trend that kicked of this year's issuance pipeline, as all of the deals on offer are marketing without wraps.

First out of the blocks was Southern Pacific Mortgages with a GBP700 million Southern Pacific Securities 2005-1 Plc, offered in U.S. dollar, euro and sterling denominations, with a total of GBP266 million of fast-pay A1 notes pricing at 8 basis points over Libor. All tranches priced within price guidance, all set tighter than levels for the two competing deals in the market last week. Further down the curve at the double-A, single-A, triple-B and double-B levels, the deal came in at three, six, 14 and 11 basis points basis points over Libor, inside RMAC-NSP4 plc, the last U.K. subprime RMBS to price in November 2004, said market sources.

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