SIV restructurings alone do not a structured finance industry make

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  • Zombies stalk the market

    The other area keeping established securitisation teams busy on both sides of the pond is that of zombie securitisations, i.e. RMBS deals structured specifically to meet the criteria of the BoE's special liquidity scheme and the US equivalent.

    Recent examples include Lloyds TSB's £10 billion Arkle (CC and A&O advised) and HBOS's recent Permanent Master Issuer "taps" (Sidley and A&O), as well deals by RBS and others.

    To the lawyers there is not much difference (call options aside) between writing a prospectus for one of these and a deal that is actually being sold. How long the market can be (artifically?) supported by these deals remains to be seen, but they must be keeping the big practices at least ticking over in the hope buyers come back (only way to sell deals at present seems to be by offering at least 85 basis points over LIBOR).

    Time to start praying to the gods of covered bonds...

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