Friends Provident is the latest U.K. life insurer to tap the securitization market for funding. Following the Norwich Union deal, completed in October, Friends Provident comes after somewhat of a recent renaissance in the sector this year.

Friends Provident is expected to raise £380 million ($726 million) through its securitization. Although details on the deal were still preliminary, market sources speculated that the new deal will be more in line with the Gracechurch series of life insurance deals.

"The Norwich Union deal functioned more like a financial reinsurance product and from what we've heard so far this new deal is looking to securitize the embedded value of their books, effectively having a monoline wrap for the risk associated with that type of asset," said one market source. Barclays Capital is sole manager on the Ambac wrapped deal.

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