The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

US buyers welcome robust UK RMBS supply

Granite and Aire Valley sell-downs pique interest; deals will be structured for US buyers

By Ben Edwards

After a glut of UK RMBS issuance pushed spreads out to their widest levels in three and a half years in 2015, US money managers are eyeing UK deals for potential bargains and could help soak up what is expected to be another year of elevated supply.

“UK RMBS cheapened meaningfully this fall, which made it more attractive in terms of relative value to the US,” says Curtis Manning, senior ABS analyst at Henderson Global. US investors have been prompted to start buying again.

By mid-January the average asset-swap margin on mortgage-backed securities issued in sterling had jumped to around 140 basis points, the widest level since the summer of 2012, according to a Markit index. The average spread was 96bp at the start of 2015.

A lack of domestic UK RMBS investors means that any spike in new issuance can cause spreads to gap out, even if the underlying mortgages remain solid, says John Kerschner, head of securitization at Janus Capital, who has been buying UK RMBS again since last March.

Around $12.5 billion of prime UK RMBS was issued last year, almost three times what was issued in 2014, Dealogic data show.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree