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2003 - The Year Hbos Created Itself A Aaa German Sausage Machine

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First English covered bond: HBOS paves the way

Resource type: Articles: know-how

Read it and weep. Ring fenced assets - yes, those of the taxpayer.

http://finance.practicallaw.com/1-102-3934

Status: Published on 30-Jul-2003

Jurisdiction: United Kingdom

The first covered bond has been issued under English law. HBOS's mortgage-backed bond is modelled on the German Pfandbrief and draws on securitisation techniques to ring-fence assets.

Kirsten Birkett, PLC.

Despite being well-established in continental Europe, it has taken until now for the first covered bond to be issued under English law. HBOS's new financial instrument is a bond backed by mortgages, and is modelled on the German Pfandbrief. Goldman Sachs and Citigroup, HBOS's investment banks, were behind the idea.

HBOS raised EUR3 billion through the issue, which was EUR1.7 billion oversubscribed. "We are selling the bonds to a wide range of investors throughout Europe: to those who would naturally invest in covered bonds and those who like our product," says David Balai, head of capital markets and securitisation at HBOS Treasury Services. "We are trying to diversify our investor base," he adds. The issue closed on 25 July 2003.

The bonds have a triple A credit rating (compared with HBOS's own double A rating). This makes them very attractive to investors and also enables HBOS to offer a low interest rate (the coupon is 3.75%). "It provides comparatively cheap funding," says Angela Clist, partner at Allen & Overy, advisers to HBOS on the issue, "and I would therefore expect it to appeal to other English banks."

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Goldman Sachs and Citigroup, HBOS's investment banks, were behind the idea.

Goldman ****ing ******* *********** ******* **** ******* ********s ****ed us. Just ****ing ******** the ********** ******* ******* bankers.

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It's an article from 2003...

Skim read it, didn't pick up on the date :)

http://www.bankofengland.co.uk/mfsd/iadb/Repo.asp?Travel=NIxIRx

Thu, 10 Jul 2003 3.50

The base rate a few weeks before dropped so this loan was only 25 basis points above the base rate at the time of issue. So HBOS I presume makes money when the base rate increases but would lose it the base rate dropped?

How long was this bond for?

Thu, 05 Mar 2009 0.50

So for over 18 months now the base rate has been 325 basis points below the bond issue.

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Former Goldman Sachs international Managing Director, Gavyn Davies, was still BBC chairman in 2003.

It's interesting when you look at which organisations and people were at the heart of our core institutions during the housing and securitisation boom.

http://en.wikipedia....ki/Gavyn_Davies

and of course James Crosby later handed the reins of power at the FSA in 2004 to ensure there was a 'light touch' regulation.

http://en.wikipedia.org/wiki/James_Crosby_(banker)

It's almost as if there was a 'plan'.................................

Still, at least everyone got rich - oh sorry, they got rich, subsidised by everyone else.

Onto the next game...............

No vote. Nothing's on paper. There's no one to blame. It's as old as the crucifixion. Or the military firing squad. Five bullets, one blank. No one's guilty. Everybody in the power structure has a plausible deniability. No compromising connections except at the most secret point. But it must succeed. No matter how many die or how much it costs the perpetrators must be on the winning side and never subject to prosecution for anything by anyone. That is a coup d'├ętat.

How many people have been prosecuted or gone to jail so far?

Edited by Red Karma

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Former Goldman Sachs international Managing Director, Gavyn Davies, was still BBC chairman in 2003.

It's interesting when you look at which organisations and people were at the heart of our core institutions during the housing and securitisation boom.

http://en.wikipedia....ki/Gavyn_Davies

and of course James Crosby later handed the reins of power at the FSA in 2004 to ensure there was a 'light touch' regulation.

http://en.wikipedia.org/wiki/James_Crosby_(banker)

It's almost as if there was a 'plan'.................................

Still, at least everyone got rich - oh sorry, they got rich, subsidised by everyone else.

Onto the next game...............

How many people have been prosecuted or gone to jail so far?

They don't go to jail, they get an OBE

I like this bit of his wiki page best

Since his resignation, he has become somewhat of a critic of the then Labour government.

Yeah, no point backing the losers, i'm sure he's ingratiating himself with the new lot.

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  • 140 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
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      • Even
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      • up 5%



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