Northern Rock, one of the U.K.'s most-prolific issuers of residential mortgage-backed securities, is planning to extend its U.S. investor base with its first deal of the year. The deal will feature a $2.2 billion series tranched into pieces to appeal to money market and Fed funds investors as well as structured investment vehicles, says Chris Storey, Newcastle-based securitization manager. Northern Rock brought two jumbo RMBS deals last year.
The U.S. roadshow for the deal begins this week, and Storey says Northern Rock would like to price the deal next week to capitalize on being the first big RMBS deal out of the U.K. this year. Securitization will continue to play a large role in Northern Rock's funding plans to grow its mortgage book, says Storey. One reason for using the RMBS market is it helps limit the amount of risk-weighted assets on balance sheet, as well as being cost-efficient, explains Storey. The upcoming deal will also feature a £770 million series and a E1.15 billion series.