After talking about it for many months, British mortgage lender Northern Rock has confirmed that it is about to get round to launching a mortgage-backed securitization.
The Newcastle-based mutual-turned-bank has mandated JP Morgan to arrange the first deal in what is likely to be a repeat issuance program. The program "will be opened, barring market conditions moving against us, in September, with the first issue actually taking place at the start of October," said Adam Applegarth, Northern Rock's executive director.
He declined to say how large the deal would be or give other details, but market sources suggested that a deal of around GBP500 million is likely.
Northern Rock sparked excitement in the financial press - and talk of a shift in the economics of the U.K. mortgage market - when it announced its securitization plans at the beginning of the year (ASRI 2/8/99 p16). It said that securitization would prove cheaper than attracting retail deposits, after new entrants in the savings market, like the Prudential's Egg, began offering accounts with generous interest rates.