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Leeds BS raises £250m through covered bond issue

Leeds Building Society has raised £250m of 10-year long-term funding through a covered bond issue, the first of its kind in the UK since June 2007.

Chief executive Ian Ward says the move could lead to others looking at this method of funding.

He says: “It is very pleasing to raise £250m through the covered bond issue, particularly as this market has been closed for so long. I am sure that other financial businesses will look at the market to raise funds and this issue has the potential to be the forerunner to many more of its type, as organisations look to generate long-term wholesale funding.”

The bond is also the first of its type which is backed by residential mortgages.

Ward says: “The Society has also raised a further £250m of wholesale during recent months, for periods between three and five years, through private placements and other arrangements. This means that we are now very well placed, having secured most of our long-term funding requirements for 2010 to 2011, to increase the level of our residential mortgage lending.”

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