Bloomberg News

ING Plans Debut in European Mortgage-Backed Securities Market

October 14, 2011

Oct. 14 (Bloomberg) -- ING Groep NV may sell mortgage- backed securities in Europe for the first time, according to Martin Nijboer, the Dutch firm’s head of long-term funding.

The biggest Dutch financial-services company may be ready to sell bonds packaging Dutch home loans in a private placement this year, and is considering a public sale of the debt in 2012, Nijboer said in an interview yesterday.

Top-rated bonds backed by Dutch mortgages yield 148 basis points, or 1.48 percentage points, more than benchmark rates on average, according to JPMorgan Chase & Co data. That compares with a spread of 215 basis points that investors demand to hold Amsterdam-based ING’s 1 billion euros of unsecured floating-rate notes due 2016, according to Bloomberg Bond Trader data.

“I can see us doing public RMBS transactions, which we haven’t done so far,” apart from a deal priced in Australia, Nijboer said. “The RMBS market is now significantly tighter than the senior unsecured market.”

Banks create mortgage-backed securities by pooling home loans and selling them to investors as notes. The bonds allow lenders to raise capital more cheaply than by issuing unsecured debt.

Dutch companies are the second-largest sellers of mortgage- backed securities in Europe after U.K. issuers, JPMorgan data show. Delta Lloyd NV, Rabobank Groep and other Dutch firms placed at least 15.3 billion euros ($21 billion) of mortgage- backed securities this year, JPMorgan data show.

Delta Lloyd sold about 434 million euros of top-rated bonds packaging home loans originated by its Amstelhuys NV unit, the insurer said on Oct. 6.

--Editors: Andrew Reierson, Michael Shanahan

To contact the reporters on this story: Maud van Gaal in Amsterdam at mvangaal@bloomberg.net; Esteban Duarte in Madrid at eduarterubia@bloomberg.net

To contact the editors responsible for this story: Paul Armstrong at Parmstrong10@bloomberg.net.


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