Investec to package £250m of subprime for UK market

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. It was withdrawn due to lack of demand at a reasonable price, the bank said.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 ov...