Lloyds Banking Group is reopening its U.K. Permanent master trust and it plans to offer bonds denominated in US dollars, U..K sterling and euros, according to Moody's Investors Service.
Lloyds last issued a deal from the trust in 2013.
The planned offering, Permanent Master Issuer plc 2015-1 is backed by a portfolio of U.K. mortgages worth £17.72 billion ($27.16 billion).
Most of the loans (68% of the collateral pool) are floating rate and are indexed to the Halifax Standard Variable Rate; 5.5% are indexed to Bank of England base rate; and 26.6% of the loans are fixed rate. The loans have a remaining term of 13.48 years and have on average made 10 years of monthly payments. The loans have an average loan to value ratio (LTV) of 58.8%, low relative to the average LTV of 67% across the UK RMBS Master Trust sector.
However the pool may be at risk of deterioration of asset quality since the structure allows additional loans to be added to the trust on a continuous basis, including lans that are not fully performing. Loans will only be excluded if they are greater than one month in arrears or have been so in the previous 12 months
Moody's assigned preliminary 'Aaa' rating to three tranches of class A notes; 'Aa2' rating to the class 1B notes; 'A2' rating to the class 1M notes; and 'Baa2' rating to the class 1C notes. The notes are scheduled to mature in July 2042.
Lloyds Bank, JP Morgan and ING Banks are the lead managers.
