A lack of prime RMBS issuance last year created
a window for non-conforming and more bespoke trades.
Here’s what to expect from 2014
Issuance of new prime UK residential mortgage-backed
securities (RMBS), whether on a standalone basis or through
master trust structures, was very limited last year. Data from
the Association for Financial Markets in Europe shows that UK
RMBS issuance for the whole of the 2013 was approximately
€8.4 billion compared to €39.5 billion in 2012. A
similar decline was seen across the European RMBS market last
year. New issuance across the continent stood at €64.8
billion in 2013, compared to €133 billion in 2012.
While the Bank of England's Funding for Lending Scheme (FLS)
undoubtedly provided an attractive alternative source of
funding for UK lenders, other factors were at play. The low
volumes were also driven by greater diversification by
financial institutions between wholesale...