Rating agencies do not often react with a change in outlook to positive when a borrower announces a debt transaction (unless the deal is M&A related). But Standard & Poor’s placed Northern Rock’s A credit rating on positive outlook in reaction to the UK motgage bank’s Whinstone Capital Management deal. At just €422.7 million this credit-linked note via Barclays Capital and Lehman Brothers is far from the biggest deal in European structured finance but it is certainly one of the more significant from a capital and risk management perspective.
It is a funded synthetic securitization of the first-loss position of Northern Rock’s Granite RMBS programme.
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