OREANDA-NEWS. S&P Global Ratings today assigned its 'AAA (sf)' credit rating to Lanark Master Issuer PLC's series 2016-1 class 1A notes. At the same time, we have affirmed our ratings on all of the master trust's outstanding class 2012-2 to 2015-1 class A notes issued in previous series (see list below).

Our ratings reflect our assessment of the main features of the transaction and the potential effect of this issuance on Lanark Master Issuer's other rated notes.

A pool of first-ranking mortgages, secured on properties in England, Scotland, and Wales, backs the notes. Clydesdale Bank PLC and Yorkshire Bank Home Loans Ltd. originated the mortgages in the master trust.

Clydesdale Bank, a wholly owned subsidiary of CYBG PLC, offers a comprehensive range of banking and other related services. Its mortgage business focuses on residential prime owner-occupied borrowers, as well as buy-to-let mortgage products originated through its branch network and intermediaries.

This is the eighth public issuance from the Lanark Master Trust, which was established in 2007.

Of the pool, about 30% are offset mortgages, where a mortgage loan's current balance and the borrowers' corresponding current or savings account balances are offset against each other to reduce interest payments on the mortgage loan. If the seller becomes insolvent, the borrowers could set off their mortgages against their deposits or current account balances. Therefore, these loans are subject to setoff risk. Furthermore, the trust relies on the seller to pay the offset benefit, which is the difference between the interest payment that would be due without the offsetting, and the interest payment that is due after taking the offsetting into consideration.