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UK residential mortgage backed securities (RMBS) have dominated the thoughts of European securitisation investors over the past week.
HBOS priced a pound(s)5.5bn Permanent deal last Friday, its first RMBS compliant with the US Securities and Exchange Commission's Regulation AB; Lloyds TSB announced its first ever RMBS; and Barclays Bank announced its second Gracechurch deal.
Investors are also awaiting the debut offering from Alliance & Leicester, expected in November from arrangers Barclays Capital and Citigroup.
Lloyds TSB's deal is named Arkle Master Issuer after the 1970s champion racehorse.
Lead managed by Citigroup, Lehman Brothers and Lloyds, the deal will be notable for its pound(s)5.6bn ($10.4bn) size -- but also as Lloyds' first step in a planned series of securitisations for itself and its clients. Lloyds has not previously been a big player in the term ABS market.
The drive began in 2001 when Lloyds hired Mark Escott from Bankgesellschaft Berlin to set up its ABCP conduit, Cancara Asset Securitisation.
The bank stepped up a gear in September 2005 when it hired a structured credit team from Fortis, headed by Richard Goldthorpe, and recruited Chris Tessler from HVB to run structured credit distribution.
So far, Lloyds has worked on a handful of term securitisations as joint lead manager -- CLOs for Blackstone Debt Advisers and KBC Financial Products and a non-conforming RMBS for Lehman Brothers.
'Work with us'
"It's something of a flagship transaction for the establishment of our name in the ABS business and speaks to our model for developing greater expertise in the structured credit business in general," said Aubrey Simpson-Orlebar, a syndicate official at Lloyds TSB in London.
"Starting with our own in-house transaction makes sense because it gives us the leverage to go to other people and say:'We trust ourselves with this stuff and we'd like to work with you as well.'"
As well as helping with the hoped-for transformation of Lloyds...