A prime RMBS deal was announced in Europe this week —  Alliance & Leicester’s £1 billion ($1.54 billion) offering backed by U.K. mortgages. Alliance is Spanish bank Santander's U.K. unit.

Barclays Capital, Deutsche Bank and Credit Suisse are all leads on the deal along with Santander.

It will offer two 4.5-year tranches , issued in euro and sterling denominations, and features a fixed sterling tranche with a weighted average life of 6.9 years. According to market reports, the deal will be roadshowing until mid next week.

This is the third U.K. RMBS deal to come to market in 2010 but, according to a Reuters report, it's the first U.K. RMBS since the crisis started that was structured without a put option that protects investors from extension risk.

Earlier this month, U.K.'s Co-operative Bank launched a £2.5 billion deal through its Silk Road Finance Number One vehicle, although ₤1 billion was pre-sold to JPMorgan.

Only the triple-A rated class A1 note was publicly offered and, according to analysts at Unicredit, of that only £375 million was placed with third party investors out of an initial £500 million targeted.

“The shortfall in the actual placement compared to the originally targeted volume reflects mainly the current threadbare Sterling floater universe for which demand is obviously limited,” Unicredit analysts said. “Furthermore, some investors seem to not be entirely comfortable with the Co-op exposure embedded in Silk Road’s structure: though rated, the building society is obviously not publicly listed, which seems to have been unfavorable.”

In January, Lloyds Banking Group launched its £2.5 billion, multi-currency deal that also offered a U.S. dollar tranche.

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