Preliminary Rating Assigned To U.K. Prime RMBS Transaction Lanark Master Issuer's Series 2019-1

  • We have assigned our preliminary 'AAA (sf)' rating to Lanark Master Issuer's series 2019-1 class 1A notes.
  • A pool of first-ranking mortgages, secured on properties in England, Scotland, and Wales, will back the notes.
LONDON (S&P Global Ratings) Feb. 4, 2019--S&P Global Ratings today assigned 
its preliminary 'AAA (sf)' credit rating to Lanark Master Issuer PLC's series 
2019-1 class 1A notes (see list below).

Our preliminary rating reflects our assessment of the main features of the 
transaction and the potential effect of this issuance on Lanark Master 
Issuer's other rated notes.

A pool of first-ranking mortgages, secured on properties in England, Scotland, 
and Wales, will back the notes. Clydesdale Bank PLC and Yorkshire Bank Home 
Loans Ltd. originated the mortgages in the master trust.

Clydesdale Bank, a wholly owned subsidiary of CYBG PLC, offers a comprehensive 
range of banking and other related services. Its mortgage business focuses on 
residential prime owner-occupied borrowers, as well as buy-to-let mortgage 
products originated through its branch network and intermediaries.

This will be the 12th public issuance from the Lanark Master Trust, which was 
established in 2007.

Of the pool, about 15% are offset mortgages, where a mortgage loan's current 
balance and the borrowers' corresponding current or savings account balances 
are offset against each other to reduce interest payments on the mortgage 
loan. If the seller becomes insolvent, the borrowers could set off their 
mortgages against their deposits or current account balances. Therefore, these 
loans are subject to setoff risk. Furthermore, the trust relies on the seller 
to pay the offset benefit, which is the difference between the interest 
payment that would be due without the offsetting, and the interest payment 
that is due after taking the offsetting into consideration.
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