Monday, Feb 11, 2008
This is a very, very ominous sign
Telegraph: Standard Chartered's SIV forced into receivership
Whoopsie
Standard Chartered has been forced to place Whistlejacket, the structured investment vehicle (SIV) it manages, into receivership after credit market problems slashed the value of the SIV's assets in half.
The specialist Asian lender was preparing to bail out Whistlejacket with a $7.15bn funding line before a sudden collapse in the value of the assets triggered today's "enforcement event". Under the rules governing the SIV, a receiver has now had to be called in.The action will be a severe embarrassment for Standard Chartered, which has had months to address the problems at Whistlejacket - the first UK SIV to go into receivership. It first took a cautious approach last year by slicing the assets up between investors, taking $3.3bn itself for its own 25pc equity stake.
Posted by lvmreader @ 06:03 PM (622 views) Add Comment
3 Comments
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1. lvmreader said...
Temasek on collision course with Standard
http://www.guardian.co.uk/business/2008/feb/10/standardchartered.investmentfunds
Temasek, the Singaporean state investment agency, is planning to lift its stake in Standard Chartered to more than 20 per cent, setting the scene for a possible clash with the Hong Kong Monetary Authority and the bank's board.
Standard, under chairman Mervyn Davies, is worried it will lose the right to issue bank notes in Hong Kong, its largest market, under new rules issued by the former British colony's financial regulator.
The watchdog has stipulated that 'note-issuing banks shall have no association with any foreign government that is entitled to exercise 20 per cent or more of the [institution's] voting power'.
Standard has been printing Hong Kong bank notes for more than 100 years, a business from which it derives 'enormous prestige', a spokesman says.
Temasek, Singapore's principal sovereign wealth fund, is intending to raise its stake above its current 19 per cent and could raid the market within weeks. A City source says: 'They want to go well beyond 20 per cent, but below the 30 per cent threshold that would force them to launch a full takeover.' Standard is said to be ready to fight to retain its right to print bank notes; if the Singaporeans up their stake, the bank hopes Temasek will support an appeal that could be lodged with the regulator. 'Otherwise, sparks could fly,' says an observer.
Standard refused to comment on what it described as a 'hypothetical situation'.
A more Machiavellian theory is that the Chinese, who own Hong Kong, are seeking to put pressure on Temasek to sell them its stake. At the end of last year, three of China's biggest banks sounded out the Singaporeans about a sale, but the overtures were rejected. An analyst said: 'This all feels like a cat-and-mouse game and I wonder if Standard can retain its independence.'
2. quiet guy said...
'Standard Chartered continued to insist that the assets are "high quality".'
Hmm.. The market will decide. Rather them than me.
3. lvmreader said...
There are 30 SIVs, most of which will hold similar assets to WhistleJacket.......