Lloyds Banking Group sold £2.5 billion ($3.9 billion) of mortgage-backed bonds denominated in euros, sterling and dollars.
The U.S. tranche of the deal was the first issue from a non-U.S. lender since 2007 and Lloyds doubled the size of that issue to $1billon on the back of strong investor demand.
The three-year dollar tranche offered at 115 basis points over Libor, while the five-year sterling was at three-month Libor plus 130 basis points. The previous Lloyds sterling tranche came at 170 basis points over three-month Libor.
Two-fifths of the deal went to fund managers while almost a third was taken up by banks.
There has been much speculation that the private label RMBS market would stage its return this year.
According to Fitch Ratings, there has been interest in securitizing seasoned loan portfolios acquired through mergers or through the acquisition of a former lender.
“Additionally, in recent months, there have been increased inquiries from issuers interested in credit enhancement levels for potential transactions collateralized by newly originated jumbo prime fixed-rate loans with full income documentation,” analysts said.