Tuesday, June 17, 2008

Securitization is dead, long live securitization!

(FT Alphaville) The biggest zombie-securitisation yet: £11.5bn Arkle 2008-1 series, from Lloyds TSB - a huge residential mortgage backed deal, £10.5bn of which meets collateral requirements for use in the Bank of England’s Special Liquidity Scheme.

Who says there’s no future for securitisation?

Lloyds have retained all of the Arkle 2008-1 tranches detailed below. The triple A’s are eligible for use as BoE collateral. From Moody’s:
London, 13 June 2008 — Moody’s Investors Service has today assigned definitive credit ratings to the following classes of notes issued by Arkle Master Issuer Plc:

- Aaa to the GBP 1,363,400,000 Series 1 Class A Mortgage-Backed Floating Rate Notes due February 2052
- Aa3 to the GBP 52,100,000 Series 1 Class B Mortgage-Backed Floating Rate Notes due February 2052
- A2 to the GBP 37,300,000 Series 1 Class M Mortgage-Backed Floating Rate Notes due February 2052
- Baa2 to the GBP 47,200,000 Series 1 Class C Mortgage-Backed Floating Rate Notes due February 2052
- Aaa to the GBP 1,817,900,000 Series 2 Class A Mortgage-Backed Floating Rate Notes due February 2052
- Aa3 to the GBP 69,450,000 Series 2 Class B Mortgage-Backed Floating Rate Notes due February 2052
- A2 to the GBP 49,700,000 Series 2 Class M Mortgage-Backed Floating Rate Notes due February 2052
- Baa2 to the GBP 62,950,000 Series 2 Class C Mortgage-Backed Floating Rate Notes due February 2052
- Aaa to the GBP 1,817,900,000 Series 3 Class A Mortgage-Backed Floating Rate Notes due February 2052
- Aa3 to the GBP 69,450,000 Series 3 Class B Mortgage-Backed Floating Rate Notes due February 2052
- A2 to the GBP 49,700,000 Series 3 Class M Mortgage-Backed Floating Rate Notes due February 2052
- Baa2 to the GBP 62,950,000 Series 3 Class C Mortgage-Backed Floating Rate Notes due February 2052
- Aaa to the GBP 2,726,850,000 Series 4 Class A Mortgage-Backed Floating Rate Notes due February 2052
- Aa3 to the GBP 104,150,000 Series 4 Class B Mortgage-Backed Floating Rate Notes due February 2052
- A2 to the GBP 74,600,000 Series 4 Class M Mortgage-Backed Floating Rate Notes due February 2052
- Baa2 to the GBP 94,400,000 Series 4 Class C Mortgage-Backed Floating Rate Notes due February 2052
- Aaa to the GBP 2,751,850,000 Series 5 Class A Mortgage-Backed Floating Rate Notes due February 2052
- Aa3 to the GBP 94,150,000 Series 5 Class B Mortgage-Backed Floating Rate Notes due February 2052
- A2 to the GBP 59,600,000 Series 5 Class M Mortgage-Backed Floating Rate Notes due February 2052
- Baa2 to the GBP 94,400,000 Series 5 Class C Mortgage-Backed Floating Rate Notes due February 2052

The size is the main thing that makes Lloyds’ transaction stand out. The last such SLS zombie-securitisation was closed by RBS last Tuesday and was a third of the size at £3.71bn.

Also, of course, the issuer itself. Lloyds has seen little direct impact from the credit squall. Why then, raise so much, other than to take advantage? Certainly helpful when you’re considering takeovers.

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