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 Cookiesbefore 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.

HBOS attempts a jump-start

HBOS deserves the gratitude of its rivals for its attempt at a UK RMBS benchmark, but it may prove futile in the short term.

The refrain has been unilateral and increasingly plaintive: "The European securitization market cannot recover until one of the UK master trusts comes back to the market". With spreads having shot from around 9 basis points over Libor to triple digits last summer it is hardly a surprise that those master trust issuers were less than enthusiastic to assume the role of trailblazer. So when HBOS announced a small (£500 million) issuance from its own Permanent UK RMBS master trust in May it was both a sign of how far the market had fallen and a signal seized upon by some that the worst could really be over.

HBOS is unequivocal that this was an attempt to set a benchmark pure and simple. This Permanent trade tries to establish a level at which European ABS can trade again. It also aims to restore a shred of normality to the RMBS market and enable more esoteric asset classes such as CMBS to find some sort of level.

The move is well-intentioned, any benefit may be some time coming. How can securitization hope to return as a realistic funding option for bank lenders while spreads remain so high? The banks’ efforts to rebuild equity capital have distracted attention from their funding struggles.

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