Mortgage-backed issue from Bank of Ireland

By Tracy Corrigan

TWO important deals launched on Friday in the growing sterling asset-backed bond market may herald a quickening of the pace of securitisation in the UK. Securitisation allows companies to remove assets from their balance sheets, by repackaging and selling them as bonds.

Two landmark deals – a mortgage securitisation by National Westminster Bank and a loan securitisation by Barclays Bank – are widely expected to emerge in the next few months.

Last Friday, Bank of Ireland Home Mortgages, the Bank of Ireland’s UK mortgage subsidiary, returned to the sterling mortgage-backed securities market after a five-year absence in order to find its expanding £2.6n mortgage book.

The Bank of Ireland’s third public mortgage-backed offering consisted of a £250m issue of floating-rate notes issued through a special purpose company, Residential Property Securities No. 3, and arranged by NatWest Capital Markets. It had previously completed two private placements.

The Bank of Ireland bought Bank of America Finance’s mortgage business in 1987. Mr Tom O’Neill, finance director at Bank of Ireland Mortgages, described the securitisation as “a very attractive way of financing our business,” and said the bank would continue to tap the market.

Also in the sterling market, Anglo Leasing, a subsidiary of the Summit Group, a UK leasing company, launched the first issue in the UK backed solely by lease receivables. Lease receivables have been used to back commercial paper. The £165m issue of FRNs, arranged by Kleinwort Benson, is backed by leases on business equipment such as photocopiers, vending machines and computers.
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