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Lloyd’s Issues LIBOR-Based Mortgage Backed Bond |
February 1, 2010
According to Reuters, Lloyd’s has issued a residential mortgage backed bond with yields based on LIBOR, the London Interbank Offered Rate. LIBOR is a filtered average of rates that banks charge each other for unsecured, short-term loans.
The $1 billion tranche in US Dollars marks the first such deal in American currency since the onset of the credit crunch in 2008. The dollar tranche will have a yield of LIBOR plus 115 basis points. A sister tranche in Sterling will have a yield of Three-Month LIBOR plus 130 basis points. A previous Sterling tranche had a yield of Three-Month LIBOR plus 170 basis points.