April 2007
Bank funding: HBOS keeps its options open
HBOS has incorporated a 2008 call option into the pre-placed mezzanine tranches of its latest Permanent RMBS transaction, which could be an indication of the largest UK mortgage originator’s issuance plans post-Basle II: a possible cessation of sub-triple-A RMBS issuance. "The cost of getting capital relief from the issuance of sub-triple-A paper for a prime residential mortgage portfolio is relatively expensive for us," says Robert Plehn, head of securitization and covered bonds at HBOS Treasury Services in London. "Given our alternate source of capital and the...
