The Co-operative Bank has delivered the second U.K. RMBS of the year via its Silk Road Finance 1. The new series will issue a maximum of ₤2 billion ($3.13 billion) of RMBS notes.
Information on the pool remains limited but, according to Fitch Ratings, the triple-A piece carries a substantial credit enhancement of 18%, well above that seen in typical prime U.K. RMBS. Most of the notes are expected to be retained or pre-placed but market analysts said that a successful syndication of the remainder could signal the opening of the primary market to new less vanilla issuers and programs.
If the class A1 notes are not redeemed in full by Silk Road on the expected maturity date, March 2015, the noteholders have the option to have their notes redeemed by Silk Road in an amount equal to the then principal outstanding balance of the class A1 notes plus accrued interest, minus amounts recorded on the class A principal deficiency ledger.