H African banking group Investec plans to test the market with a £250m securitisation of “non-standard” mortgages, including some subprime loans.
If it is successful, the deal would mark the first time subprime mortgages have been securitised in Europe since the financial crisis.
People familiar with Investec’s plans said they had lined up a selection of investors for the issue and that it expected to have to pay a coupon of between two and three percentage points over Libor.
The deal should be launched over the coming three to six weeks.
Investec, which operates in South Africa, the UK and Australia, said last week it expected a slight uptick in first-half profit, as weak demand for loans was offset by growth in its fund business.
South Africa’s fifth-largest bank said it expected operating profit to be “marginally higher” in the six months to the end of September, without giving any figures.
Operating profit totalled £350.28m in the same period a year earlier.
The banking group recently said last week that it could make an acquisition to build its asset management business.