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Investec to publicly place £204m in RMBS

Kensington Mortgages’ parent company Investec is looking to publicly place all of its £204m residential mortgage-backed securitisation, Money Marketing understands.

RMBS activity has increased significantly over the past year but experts say issuers are retaining large chunks of the transactions, which means less capital is created for mortgage funding.

Before the 2008 crisis, originators would usually publicly place the entire transaction with end-investors, excluding the lowest-quality tranche, which would be retained by the issuer.

The Investec deal, Gemgarto 2011-1, is backed by a pool of prime residential mortgages originated by Kensington since its return to lending in November 2009.

The deal, announced this month and which has not yet been priced, contains a full capital structure, meaning it is not solely made up of AAA notes.

Investec declined to comment.

Standard & Poor’s analytical manager of new RMBS issuance in EMEA Farid Shavaksha says: “A full capital structure offered from the originator that started the whole non-conforming market in the UK is another small step towards a reopening of the wholesale markets.”

Home Funding chief executive Tony Ward says: “It is good to see investors willing to invest in subordinated notes in UK house price risk because it is a vote of confidence for the RMBS sector.”

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