SNS Bank finds many uses for fixed rate ‘A3’ tranche
Before announcing a new RMBS from its Hermes shelf this week, SNS Bank had been grappling with ways of reducing swap costs while keeping investors reassured that their floating rate notes would be unaffected.
The banks solution was the inclusion of a fixed rate A3 tranche a tactic that could be replicated by other ABS programmes with mixed floating-fixed collateral pools.
The senior part of the Hermes 18 capital stack contains 192m A1 and 384m A2 floating rate tranches with WALs
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