European securitization is back to its buzzing best it would seem. After a month of underwhelming supply, there are now so many deals that three of the issuers out with trades start with V: Vantage, Vida Bank and Volkswagen.
Essential to such a lexical coincidence is Vida’s recent name change from Belmont Green. The name changed when it got a banking licence at the end of last year, and while it always intended to return to RMBS, it was perhaps uncertain what form its deals would take.
The first one comes from a new shelf, London Bridge, in contrast to previous Tower Bridge trades. Unlike previous deals, Vida is offering the residuals along with the call rights, so it will be able derecognise the assets and achieve capital relief.
Since RMBS spreads began moving tighter at the end of 2023, such derecognition trades have become a popular play. Vida follows a long line of banks, including Hampshire Trust Bank, Tandem Bank and just this week Shawbrook.
Banks also have to choose whether to sell the seniors. Shawbrook opted against, but Vida has put them on offer for the funding benefit.
Despite recently passing £1bn in deposits, Vida plans to keep RMBS as part of its funding mix. That means we haven’t necessarily seen the last of Tower Bridge, which could return if the bank wanted to keep the residuals in a triple-A only funding transaction.
Meanwhile on the rest of Another Fine Mezz this week, there’s plenty for George and Tom to unpack on what to make of recent primary action and on what Vantage’s trade means for the development of the data centre market.