By Marcus Leach

Northern Rock plc is launching its first public securitisation issue in line with its agreed strategy. This transaction will diversify both the source and term of the Company’s funding base, and will be offered to investors in Sterling and Euros.

The size of the transaction is expected to represent approximately 2% of the balance sheet at 31 December 2010, and Northern Rock will remain substantially funded by retail savings.

This will be a standalone transaction, secured on high quality UK mortgage assets, selected from the Company’s total loan book of £12.2 billion. The average indexed LTV of the Company’s mortgage book was 59% at 31 December 2010.

Following the split of the former Northern Rock business at the start of 2010, all historical securitisation funding is held by Northern Rock (Asset Management) plc.