Linklaters advises on the inception of Nationwide’s innovative “stock and drop” programme

Linklaters has advised a panel of leading banks comprising Citi as Arranger and Dealer and Barclays, BNP Paribas, BofA Securities, Deutsche Bank and Lloyds as Dealers on the annual update of Nationwide Building Society’s “Silverstone” residential mortgage-backed securitisation master trust programme, and the deployment of its innovative new “stock and drop” structure for primary issuances and subsequent secondary trades under the programme.

Following the update, Silverstone issued £1.7bn of Reg S mortgage-backed notes, which will be retained by Nationwide as part of the “stock and drop” investors paradigm. Under the structure, Nationwide expects to be able to substantially improve the agility with which Silverstone notes can be placed to market investors, by entering into secondary sales of the retained notes to investors as requirements arise and dovetail with utilisation of other platforms over the coming 12 months and with the assistance of placement banks appointed from the Dealer group as Intermediary Re-Offer Banks.

This is a market-first deal for an institution of Nationwide’s size and a securitisation programme like Silverstone, and represents a move toward a quicker, more market-friendly use of the RMBS master trust.

The Linklaters deal team was led by Capital Markets partner Adam Fogarty, alongside senior US associate Emma Lance and associate Dan Hilbert.