Biggest residential-backed bond issue since before financial crisis

SANTANDER UK yesterday completed the biggest issue of residential mortgage-backed securities (RMBS) since before the financial crisis, raising £3.75bn.

The bank denied that the sale was due to its float, which is set to raise between £4.5bn and £5bn, being pushed back to the end of this year or early next. Instead, it said that higher liquidity requirements were behind the sale, the proceeds of which will go towards extra lending rather than paying back the £4.5bn it received from Banco Santander to purchase 318 RBS branches last year.

The sale signals a return of the RMBS market on a scale not seen since before the financial crisis. Santander UK sold similar instruments last year, but only to a value of £1.4bn.