A large portfolio sale of collateralized debt obligations (CDOs) reportedly planned by Royal Bank of Scotland is set to test market appetite for non-agency residential mortgage-backed securities (RMBS).

Sources said a list went out May 20 for the $8.7 billion sale resulting from the liquidation of five CDOs: PICAR 2009, series 1A through 5A. The paper is backed by private label RMBS and bids were scheduled for Tuesday, May 28.

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