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Credit FAQ Takes A Closer Look At U.K. RMBS Master Trusts

MADRID (S&P Global Ratings) Feb. 6, 2023--Current pricing volatility and rising, unpredictable interest rates are among the factors that could stimulate increased use of U.K. residential mortgage-backed securities (RMBS) master trusts, finds a S&P Global Ratings' Credit FAQ titled "A Closer Look At U.K. RMBS Master Trusts," published today.

In a market where pricing volatility is pronounced, the ability for master trusts to issue quickly is an advantage. Rising and unpredictable interest rates may also support master trust issuance, as master trusts can facilitate bullet maturing issuance which can help issuers tactically target specific "sweet spots" which may aid pricing.

As well as eyeballing potential future developments, the Credit FAQ takes a closer look at U.K. RMBS master trusts more broadly, specifically, their key structural features, how they differ from pass-through RMBS structures, and our analytical considerations.

U.K. RMBS master trust issuance began in 2000, when the rapid growth of U.K. prime loans in the late 1990s and early 2000s pushed U.K. mortgage lenders to find other ways to fund their mortgage book expansion, rather than through deposits. They diversified away from retail deposits by using RMBS--favoring master trust programs as a way to access a wider investor base, and to adapt to investors' varied risk appetites.

This report does not constitute a rating action.

The report is available to subscribers of RatingsDirect at www.capitaliq.com. If you are not a RatingsDirect subscriber, you may purchase a copy of the report by calling (1) 212-438-7280 or sending an e-mail to research_request@spglobal.com. Ratings information can also be found on S&P Global Ratings' public website by using the Ratings search box located in the left column at www.standardandpoors.com. Alternatively, call one of the following S&P Global Ratings numbers: Client Support Europe (44) 20-7176-7176; London Press Office (44) 20-7176-3605; Paris (33) 1-4420-6708; Frankfurt (49) 69-33-999-225; or Stockholm (46) 8-440-5914

Primary Credit Analyst:Fabio Alderotti, Madrid + 34 91 788 7214;
fabio.alderotti@spglobal.com
Secondary Contact:Alastair Bigley, London + 44 20 7176 3245;
Alastair.Bigley@spglobal.com

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