NAB chooses cheaper RMBS over covered

National Australia Bank’s UK Clydesdale Bank subsidiary looks set to undertake its first wholesale mortgage financing exercise since 2007 in the RMBS market, as opposed to covered bonds. The borrower had roadshowed a newly set-up covered bond programme in summer, but this has since been sidelined. The RMBS funding is not only more cost efficient but also less onerous from a ratings perspective compared to a covered bond.