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The UK securitisation market: Recent developments, and possible recovery

The UK securitisation market: Recent developments, and possible recovery. Jenny Owladi Bank of England jennifer.owladi@bankofengland.co.uk. The UK Securitisation Market. Historical Background Recent Developments Going forward Securitisation prospects Statistical reporting.

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The UK securitisation market: Recent developments, and possible recovery

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  1. The UK securitisation market:Recent developments, and possible recovery Jenny OwladiBank of Englandjennifer.owladi@bankofengland.co.uk

  2. The UK Securitisation Market • Historical Background • Recent Developments • Going forward • Securitisation prospects • Statistical reporting

  3. Historical Background • RMBS: • Issuance has grown significantly over the last ten years • Securitisations, and master trust structures, popular with main high street lenders. • Subprime & specialist mortgage lenders also tended to be financed by securitisations • CMBS: • Volumes small compared to RMBS • Other securitisations: • Small amount of credit card and auto loan securitisations • Relatively little covered bond issuance

  4. Recent Developments • Markets more or less closed for the last two years • Effects of Bank of England Special Liquidity Scheme (SLS): • MFIs can swap securities for liquid assets • Lead to large securitisations where entire issue is retained by seller. • Approx £287bn of securities used as collateral (as of 30 Jan 2009) • Covered Bonds regulation – March 2008

  5. Securitisations/Loan Transfers Source: Bank of England NB: Limited coverage

  6. Going forward • Recent issuance to the market: • Lloyds: £4bn RMBS • Barclays: €2bn covered bond • Santander: €1.75bn covered bond • Nationwide: £3.5bn RMBS • RMBS relatively expensive funding source • Covered bonds more attractive?

  7. Bank of EnglandStatistical Reporting • New reporting scheme for SPVs from Jan 2010 onwards. • All MFIs will report loans that they have securitised on balance sheet. • Claims on and liabilities to own SPVs reported separately.

  8. Any Questions? jennifer.owladi@bankofengland.co.uk

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