Lloyds Executes RMBS Sale

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Lloyds TSB proceeded with a portion of its $8.7 billion of legacy non-agency RMBS paper on Thursday afternoon, selling the paper to four different groups.

The U.K. bank said in a company press release that it sold £3.3 billion ($5 billion) to a number of American investors, including Goldman Sachs. One source familiar with the sale said Credit Suisse, Morgan Stanley and Bank of America also placed winning bids on the bonds.

“I'm hearing different reports about certain dealers buying the paper and re-offering to customers, said the market source. “Sounds like more of that than direct flow-through to end-user customers at this point.”

The U.K. banking group said in the company press release that as a result of the transaction it will realize a pretax gain on sale of £540 million ($819 million).

As part of the same transaction the Lloyds TSB Group Pension Trust (No. 1) Limited also sold its share of the portfolio of U.S. RMBS with a book value of £805 million, realizing a pretax gain on sale of £360 million, which will reduce the deficit in the scheme.


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