Interest in the deal proved so strong that LBG increased the size of the publically offered tranche from £1.8bn to £2.8bn. The total size of the deal, launched through Lloyds’ Arkle programme, was £3.4bn, with the remaining £600m tranche sold privately. US investors bought up 60% of the paper sold, having shown an increased interest in UK mortgage-backed securities this year.
LBG has launched two other securitisations in the last 12 months through its Permanent programme, backed by mortgages from its HBOS brand.
Tony Ward, managing director of Home Funding, said: “It’s good that Lloyds continues with issuance; we need more to rekindle interest from investors. It’s important that the demand for the deal was so strong and it’s extremely positive that foreign investors could look at the UK economy and housing market and feel good about it at the time of an Election.
“It’s a strong step in the right direction, but we need to see other issuers other than the top eight banks. I’m still optimistic it will happen later in the year, but we need that breakthrough. We also need to see paper below triple-A, a wider variety of assets and to get rid of options on the deals.”
