Herbert Smith has advised HBOS on the third and largest issue so far from its master trust Mound Financing – the first since February 2001. The firm gave advice in connection with the securitisation of a portfolio, comprising English and Scottish residential mortgages, under the Mound structure.
This was one of the most significant mortgage securitisations of 2003, with the sterling, dollar and euro denominated notes issued raising £2.26 billion for the Bank; this involved an increase in the trust property to approximately £7.5 billion.
The Mound Financing structure was set up by Bank of Scotland in May 2000 before it merged with Halifax. Despite the growing popularity of such structures only a handful of companies such as HBOS have put them in place; the specialist knowledge involved is therefore restricted to only a few firms.