Irish Life & Permanent, Ireland's biggest mortgage lender, issued the largest Irish MBS to date at the end of October, in a E600 million ($630 million) deal via Greenwich NatWest.

The transaction, called Fastnet 1, was the demutualized bank's first securitization of its Irish mortgages, but its second in total after a GBP400 million ($658 million) deal backed by mortgages written by its U.K. subsidiary.

As with previous securitizations of Irish mortgages, investor concerns focused on whether, with house prices in Dublin growing 40% last year, the Irish housing market is overheating. According to a GNW official, the housing boom in Ireland is underpinned by economic fundamentals, rather than an asset price bubble, but just as importantly the seasoning of the mortgages provides extra protection. "On average there is 29 months of seasoning. So when you look at the recent house price appreciation it means that against current valuations you have a lot of extra cushion," the official said.

The transaction split into two triple-A tranches and a mezzanine piece rated single-A was placed widely throughout the U.K. and continental Europe, where investors were keen to buy relatively scarce Irish paper as a way to diversify their portfolios, something most have only been able to do since the advent of the euro.

According to GNW syndicate officials, the pricing couldn't avoid being referenced to Abbey National's recent MBS deal, meaning that the 1.73 year A1 piece priced at 20 basis points over one-month Euribor, the 5.64 year A2 piece at 28 over and the 5.98 year M piece at 75 over.

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