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Lloyds Bank pulled off the first significant mortgage securitisation deal yesterday since  the start of the recession and global credit crunch.

They managed to sell a book of “prime” grade home loans that were advanced by Halifax, the subsidiary that came to the company when it merged with HBOS.

The sale, to institutional investors, was two times oversubscribed at 170 basis points over Libor - the rate at which banks lend to each other - which stood at 0.561 per cent yesterday.

Given that the loans are graded “prime” - a classification given to the most credit worthy borrowers who have a low risk of default - that is expensive particularly when compared to pre-crunch prices.

However, the securitisation market - a key source of funding for lenders - had all but dried up and the fact that the bank has successfully managed to get a sizeable deal away means other lenders may attempt similar moves over coming weeks.

The success also gives further evidence of the recovery of the financial services market place. Lord Turner, the chairman of the Financial Services Authority, said at Mansion House that it was no longer on the critical list.

The issue attracted investors from 16 different countries, although they mostly came from the UK and continental Europe. Securitisation involves the packaging up of products like loans and their sale to institutions who buy them to secure a regular coupon in return.