BN Santander, Achmea Boost Mortgage-Backed Bond Sales (Updatel) Nov 4 2010 15:54:09 (adds terms of Achmea transaction in seventh paragraph.) By Esteban Duarte Nov. 4 (Bloonberg) -- Santander U.K. Ple and Achmea flypotheekbank NV increased their planned sales of mortgage~ backed securities to meet demand from investors seeking high~ yielding top-rated bonds The British unit of Spain’s largest bank is selling $3. billion of AAA rated notes backed by U.K. hone loans, up from at least $2.8 billion initially marketed, according to two people familiar with the deal. The mortgage division of Achmea Holding NV increased its offering of Dutch mortgage bonds to 1.2 billion euros [$1.7 billion) today from 749 million euros offered earlier this week, the people said Investors are buying senior mortgage-backed securities on speculation that government bond yields will decline after Federal Reserve said it’s going to purchase an additional $600 billion of Treasuries to stimulate the world’s largest economy Yields on five-year Treasuries declined to a record low today after the second round of so-called quantitative easing Y9B2 provides more capital into the system and in particular into money market funds,” said Gordon Kerr, the London-based head of Buropean asset-backed securities strategy at Citigroup Inc, "These investors need to reinvest this capital and typically look to do so in highly rated assets, and European mortgage-backed securities fit that role perfectly.” Holmes Master The Santander deal is being conducted through its Holmes Master Issuer Plc Series 2010-1 vehicle with $500 million of class Al securities due Oct. 2011 yielding 15 basis points more than the London interbank offered rate. It will sell another $900 million of Al notes due 2014 at 140 basis points over Libor. The London-based lender also will sell 750 million euros of bonds due 2016 at 150 basis points more than Buribor, and 375 million pounds ($609 million) of fixed-rate notes due 2017 at 195 basis points more than U.K. gilts. Santander U.K. also prepiaced 500 million euros of A3 securities. Achnea sold 353.1 million euros of Al notes to yield 95 basis points more than the euro interbank offered rate and 646.9 million euros of A2 notes with a spread of 135 basis points. The deal was done through DMPL VIII BV. “Holimes and OMPL bonds are more attractive to investors after the Fed announcement,” said Attilio Di Mattia, who helps oversee 4,5 billion euros of assets at Aurelius Capital Management in Vienna. “As long as the Fed keeps pumping Liguidity, investors will keep hunting for yield and mortgage backed securities are one of the best places for that.” For Related News and Informatio Bloomberg - your definitive source If you need help on the BLOOMBERG press the HELP key twice Copyright (c) 2010, Bloonberg, L. P Lof 2