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The cost savings are substantial
Dominic Swan |
HSBC became the latest UK mortgage lender to overhaul the way in which it funds this business with the launch of its inaugural covered bond in October. But the new issuer has taken an innovative approach to its wider funding needs by placing all of its mortgage assets into a single pool, which will feed both its covered bond and future RMBS funding programmes.
HSBC revealed its plans to tap both markets in Euromoney’s April issue. However, the funding requirements and regulatory capital position of the bank mean that it is likely to favour covered bonds over RMBS. HSBC managing director Dominic Swan told Euromoney at the time that “covered bond issuance will have the biggest impact on senior unsecured term debt issuance by UK...
