Skipton Building Society and Virgin Money advanced plans to enter the covered bond market with their addition to the FCA regulated issuers list last week, the former having updated a dormant programme and the latter finalising documentation, with officials at both citing flexibility.

Skipton Building Society first set up a covered bond programme in 2008, issuing one £750m retained bond, which was cancelled in 2011.

The mortgage-backed programme has now been updated to become a UK regulated programme and become compliant with the Financial Conduct Authority’s (FCA’s) covered bond regime, and Skipton Building Society was on Monday of last week (17 July) added to the FCA’s Regulated Covered Bonds Register.

“We are delighted to have successfully completed the process with the FCA and be added to the list of regulated covered bond issuers,” Jeremy Helme, head of capital markets at Skipton Building Society, told The Covered Bond Report. “The update of the Eu7.5bn covered bonds programme is absolutely the right thing to do at the moment.”

Helme said it was too early to say whether Skipton’s future covered bond issuance will be public or privately placed, but noted the programme provides flexibility for issuance in different currencies and maturities.

An updated prospectus was published for the programme on Monday. Barclays and HSBC are the arrangers of the programme.

Skipton Building Society also updated its £2bn EMTN programme in June and subsequently issued a £350m five year senior unsecured transaction.

“We therefore have more funding tools available in addition to our established Darrowby prime RMBS programme, which we have used for the past few years,” said Helme.

Skipton Building Society is rated Baa1 by Moody’s and A- by Fitch. Any covered bonds from Skipton will be rated by both rating agency’s at the time of issue, added Helme.

Virgin Money was also added to the FCA’s Regulated Covered Bonds Register on Monday of last week, with documentation on the FCA’s website relating to a planned Eu7bn mortgage-backed programme. As previously reported, the UK bank confirmed its interest in entering the covered bond market last year, after incorporating companies relating to covered bond issuance.

“We are in the process of finalising documentation following the completion of the regulatory application,” said a spokesperson at Virgin Money. “Issuance will be subject to our funding requirements, so we can’t be definitive on timing at this stage.

“However, we expect to be a regular issuer in covered bonds subject to market conditions.”

The spokesperson said the establishment of a covered bond programme alongside Virgin Money’s already established RMBS and MTN programmes would provide “further flexibility and diversification to access the wholesale markets”.