The bank said that it will package up some of its ‘high quality’ mortgages into bonds and sell them to investors as it seeks to boost funds for lending.
The lender aims to raise around £370m, or 2% of its £18.5bn balance sheet through the securitisation. It will also remain majority funded by retail savings.
The average loan-to-value on the bank’s mortgage book was 59% at 31 December 2010.
Its return is a further sign that business at Northern Rock is returning to normal and follows the return of other banks including part-nationalised Royal Bank of Scotland and Lloyds Banking Group, to mortgage-backed funding markets over the past year.
Northern Rock will hold investor roadshow meetings in London and across Europe in the coming fortnight to discuss demand for the bonds.
