NRAM, formerly Northern Rock Asset Management, launched a tender for its last two outstanding covered bonds, totalling some £2.23bn, today (Tuesday), after having last month completed the repurchase and cancellation of another.

The institution, now government-owned, is asking bondholders to tender two covered bonds and at the same time approve the redemption of the issues. The issues are a Eu1.75bn (£1.26bn) 4.125% March 2017 and a $1.5bn (Eu1.34bn, £965m) 6.125% June 2017.

“The rationale for undertaking the Offers and the Proposals is to reduce the Company’s liabilities through the purchase by the Company of the remaining outstanding securities in order to close the Programme and to unencumber assets for future sales,” said NRAM.

The process is the same as the tender for a Eu2bn 3.875% 2020 issue that NRAM launched at the end of March and completed in May.

Investors who tender their bonds by an early tender deadline of 29 June will get a price equivalent to Bunds flat for the euro issue and Treasuries flat for the dollar, but afterwards investors will receive 0.5% less for the euro and 1% less for the dollar. Those who tendered early for the 2020 issue received a 2% premium.

Citi and HSBC are the dealer managers.