It’s the credit crunch circle of life. The residential mortgage-backed securities market that pushed the world into a financial hole is set to reopen. Lloyds Banking Group is betting on renewed confidence in UK house prices as it brings £2.8bn of AAA-rated RMBSs to market. Although these are not subprime packages, no chances are being taken with the sale.

The safety checklist is almost as thorough as for a space launch. Already lined up are “real money” investors, including pension and managed funds; no exotic highly leveraged vehicles here. And the pricing – one tranche at 170 basis points over Euribor and the rest at 180bp over Libor – is swoonworthy. Investors are set to receive about 20 times the return they could have expected before the crisis. This, though, is still about half the levels at which similar securities traded at the height of the crisis. A successful issue should see market spreads tighten further.