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Coventry enters securitisation market for first time

Coventry Building Society has entered the securitisation market for the first time with a £1.1bn issue.

The issue, called Leofric No.1, is backed by a pool of prime owner-occupied mortgages originated by the society and its intermediary lending arm Godiva Mortgages. The average loan-to-value of the pool is around 64 per cent.

Both Moody’s and Fitch Ratings have assigned the transaction a provisional AAA rating.

Coventry BS head of structured finance and funding Kris Gozra told Money Marketing the transaction would help support mortgage lending alongside retail savings deposits.

The issue follows the launch of Coventry’s €650m covered bond in October last year.

Last month, Nationwide Building Society launched a £1.5bn RMBS while Credit Suisse launched the first sub-prime issue of 2012 in a £340m deal.

In March, the Coventry BS announced it advanced £4bn in new lending throughout 2011, up 14.3 per cent from £3.5bn the year before, which represents around 2.8 per cent of all mortgage advances and about 17 per cent of all advances by building societies.

For the year to December 31, pre-tax profits rose by 12 per cent to £84.6m, from £75.3m the previous year.



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There are 5 comments at the moment, we would love to hear your opinion too.

  1. With building society securitisations, 95% mortgages etc, is this groundhog day ?

  2. Here we go again, come on FSA, sort this out.

  3. Where’s the mention of 95% mortgages? It talks about average LTV of 64%.
    Securitisation bashing is getting a little boring now, particularly when those doing the bashing don’t understand the first thing about it, other than the Daily Mail have said it’s a bad thing…how do you expect building societies to fund new lending, with magic beans?

  4. Sounds interesting, what rate are they paying? Rather an important omission from the article.

  5. To the 9.26am crowd – do you have the faintest idea what it is you’re going on about? You’ve just read the term ‘RMBS’ and immediately gone into kneejerk mode.

    Knowing the Coventry’s lending quality as I do, this sounds like it would be great deal for investors.

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