Rabobank’s RMBS is cheap to Dutch conditional pass throughs

Rabobank’s Obvion subsidiary sold nearly €2bn of five year RMBS last Thursday, at a considerable spread pick up to where Dutch pass-through covered bonds from entities with much weaker ratings would be expected to price. The deal, originated by one of the best rated banks in the world and backed by very high quality collateral, suggested that covered bond investors could be missing out by not looking at the RMBS market.