Investec is about to launch a £250m securitisation of “non-standard” mortgages, which will include sub-prime loans, according to a report in the FT.
If the deal goes ahead it would be the first time that sub-prime loans have been securitised in Europe since the financial crisis.
The portfolio will consist of standard prime loans, “non-standard”, which are primarily self-cert mortgages, and sub-prime loans.
The report says Bank of America Merrill Lynch attempted a UK sub-prime securitisation of around £1bn this summer but withdrew after experiencing a lack of demand.
It is understood the South African bank has lined up a selection of investors that it believes has an appetite for the issue.
Last week, it emerged Royal Bank of Scotland is getting ready to launch a £4.7bn securitisation, the biggest issue since the crisis, signalling that the UK securitisation market is slowly regaining confidence.