Some securitisations come off the assembly line, and some are artisanal, bespoke deals, innovating new structuring and execution approaches. Serval 2026-1, the largest equity release RMBS in UK history, is the latter.
Arranger Citi tweaked the template for equity release structures, aiming to broaden distribution, attract new investors, and prove out liquidity in the asset class. The syndication process was drawn out, prompting rivals to question the purpose of running it in public, but the results were strong, with 10 investors allocated in the class E note — typically a tranche which is effectively bilateral.
Though the deal took time to price, the results add efficiency to the ERM asset class, potentially opening the way for yet more supply from the UK life insurance sector. UK lifers have a deep well of ERM investments typically held in internal securitisation format. Outstandings in the sector are estimated to be £40-50bn, with more than £30bn on the balance sheets of the 10 largest UK lifers.
Unusual product
Equity release mortgages (reverse mortgages in the US) are an unusual product, and have very particular market dynamics in the UK. These are loans taken out later in life, usually by homeowners looking to...
