Lloyds Sells U.S. RMBS to Four Groups

Lloyds TSB proceeded with its sales of a portion of its $8.8 billion in legacy nonagency residential mortgage-backed securities paper Thursday afternoon, and has sold the paper to four different groups.

The U.K. bank said in a company press release that it sold £3.3 billion ($5 billion) to a number of American investors, including Goldman Sachs. One source familiar with the sale said Credit Suisse, Morgan Stanley and Bank of America also placed winning bids on the bonds.

“I'm hearing different reports about certain dealers buying the paper and re-offering to customers, said the market source. “Sounds like more of that than direct flow-through to end-user customers at this point.”

The U.K. banking group said in the company press release that as a result of the transaction it will realize a pretax gain on sale of £540 million ($819 million).

As part of the same transaction the Lloyds TSB Group Pension Trust (No. 1) Ltd. also sold its share of the portfolio of U.S. RMBS.