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Royal Bank of Scotland in £4.7 billion securities issues

In a sign of the times, Royal Bank of Scotland is returning to the securities backed investment market with the issue of £4.7 billion of securities backed by the company's mortgage book. This is the company's first venture back into the securitised investment market since the credit crunch began and is seen by many as a critical point in the overall recovery of the UK financial arena.

In simple terms the bank will bundle together a number of mortgages as backing for a fund-raising exercise which will free up more capital for Royal Bank of Scotland to increase its lending to the UK market. All eyes will be on this particular securitised issue which could open the floodgates to further issues from other UK banks if it is successful and investors show an appetite for the offer.

Only a few months ago an issue of this particular size would have been unthinkable but over the last few weeks investors have been looking for "safer" assets and while UK property sector is still under pressure there has been an increase in demand for mortgage backed securities. Even if the issue is successful all eyes will be on the level of return demanded by investors as a gauge of the future direction of this particularly vital area of the UK investment arena.

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