Yorkshire refinances with new investment

Picture: PA Wire
Picture: PA Wire
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Yorkshire Building Society has diversified its funding with the issue of ​€500m (£362m) of five-year covered bonds in its latest deal with institutional investors.

The society said the deal will provide long-term finance at a cost effective level which it will pass on to customers via good value mortgages.

​YBS staged a three-day road show across Netherlands and Germany last week following the upgrade of its covered bond rating to the highest rating of triple A (Aaa) by Moody’s.

The initial price guidance saw the ​s​ociety reach a book size of ​​€​950m​ (£688m)​, nearly two-times over-subscribed, from 50 institutional investors but the market was weaker as earlier deals were not well received by the market. Pricing was tightened which led to a drop in the book size​,​ but this still allowed the ​s​ociety to achieve its target amount of ​​€​500m ​Aaa/AAA rated notes from 47 institutional investors.

​More than 90 per cent of investors were from outside the UK.

​​Chris Parrish, Yorkshire Building Society’s head of treasury, said: “We are delighted with the deal. It diversifies our funding and provides long-term finance at a cost effective level which we are then able to pass on to customers by providing further good value mortgages.”