Investec is planning to securitise £250m worth of ‘non-standard' mortgages, including self-certified and subprime home loans in the UK.
The South African bank will test European investor appetite for the asset class that contributed to the financial crisis by bundling the loans within new bond issues, the Financial Times reports.
This will be the first time subprime mortgages have been securitised within Europe since the start of the credit crunch, and follows a failed attempt by Bank of America Merrill Lynch to bring £1bn of subprime to market in the summer. The issue was withdrawn due to lack of demand at a reasonable price, the bank said.
The FT reports Investec expects to pay a coupon of two to three percentage points over Libor, with the deal due to launch in the next three to six weeks.
Two global vehicles
'Further plug advice gap'
Must appoint separate CEOs and boards
Advisers do come out well
Will report to Mark Till