Long awaited UK student loan sale breaks cover
The UK government delivered a potential boost to Europe’s stagnant securitization market on Monday with its announcement that it plans to raise £12bn through securitizing part of its book of student loans by the end of 2021. The first deal from the scheme, backed by around £4bn of loans, is expected this year.
UK student loans have been securitized before, but as the first securitization of UK “income contingent” loans, the deal will create a brand new asset class for the market. Questions remain, however, if the loan sales will represent good value for the British taxpayer.
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