Santander UK Readies £1.35 Billion RMBS
Santander UK is readying an investor-placed securitization of residential mortgage loans, according to rating agency presale reports.
The £1.35 billion equivalent of sterling- and dollar-denominated notes will be issued via the bank’s Holmes Master Issuer PLC, increasing its total size to £15 billion from £13.2 billion. The notes will be indirectly collateralized by a pool of first-ranking mortgages secured on properties in England, Scotland, and Wales. Santander UK originated all of the loans in the master trust.
It is one of the few U.K. deals to be placed with investors, as opposed to serving as collateral for borrowing through the Bank of England’s Funding for Lending Scheme. Earlier this month, West Bromwich Building Society placed a £380 million ($579 million) senior tranche from the deal Kenrick No. 2.
S&P said the Holmes Master Issuer’s latest issuance will consist solely of class A notes with 20.56% of credit support. There are three, as-yet unsized tranches; a U.S. dollar money market tranche is rated A-1 by Standard & Poor's and P-1 by Moody's Investors Service; a sterling tranche expected to mature in October 2016 and another sterling tranche expected to mature in January 2017 are both rated ‘AAA’/'Aaa.'
While the trust is not issuing any new subordinated notes, a reserve fund, combined with the outstanding class B and class Z notes, will provide credit enhancement to the new class A notes.
The deal is expected to close May 30.