Principality Building Society plans to issue a comeback  U.K. RMBS, three years after it first tapped the market via the Friary 2011-1 transaction, according to a presale report published by Moody's Investors Service.

Barclays Bank and HSBC Bank are the arrangers and joint lead managers.

The upcoming deal, dubbed Friary 2, will issue a totalof £550 million ($926 million), consisting of a senior class with preliminary 'AAA' ratings that benefits form credit enhancement of 11.45% (8.75% subordination and a 2.7% reserve fund) and a subordinate class. Both have a legal final maturity in October 2046 and pay interest pegged to three-month Libor.

A report by Deutsche Bank report puts the tenor of the senior tranche at 3.4 years.

The presale report does not have any information about individual tranche sizing.

Just over 60% of the loans in the pool are fixed-rate, with the remainder pegged to either the Bank of England Base Rate or Principality Building Society’s standard variable rate. The weighted average current loan to value ratio is 65.92 and the average remaining terms is 18.71 years.

Skipton's Darrowby 3 was the last U.K. building society to tap the market, selling a senior 3.1-year tranche at 57 basis points over three month Libor.

The Deutsche Bank report puts total UK RMBS issuance for the year to date at £1.6 billion; the bank's fore

cast for the full-year issuance is £3.5 billion for 2014. However the report states that "it would take one or two more large trades for the target to be met.”

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