31st Jan 2008 08:15
Standard Chartered PLC31 January 2008 Standard Chartered PLC - Whistlejacket Capital Limited 31 January 2008 Standard Chartered announces proposal to provide liquidity to WhistlejacketCapital Limited Standard Chartered today announces that it intends to provide liquidity toWhistlejacket Capital Limited ("Whistlejacket"), a structured investment vehicle("SIV"). As the sponsor of the vehicle and as the appointed investment manager,Standard Chartered's proposed funding is intended to provide operatingflexibility to Whistlejacket in the management of its high quality assetportfolio. Under the proposal, Standard Chartered will commit to purchase commercial paperissued by Whistlejacket to meet Whistlejacket's senior obligations. StandardChartered's commitment will not exceed the outstanding amount of Whistlejacket'scommercial paper, medium term note and other senior obligations, currentlyUSD7.15 billion. There are various pre-conditions to Standard Chartered'sfunding. These include a requirement that enforcement proceedings have notcommenced and that certain key enforcement triggers, including the capital noteNet Asset Value trigger of 50%, have been amended or removed. Standard Charteredwill shortly be seeking the necessary consents from all relevant parties,including the senior debt investors, capital note holders and rating agencies.If these consents are forthcoming, Standard Chartered will provide the necessaryfunding. Whistlejacket, like other SIVs, has in recent months had limited access to theshort term commercial paper markets and its board has been actively pursuing aseries of actions to manage its liquidity requirements, which initially includedthe deleveraging of the portfolio through the sale of assets, the use of repos,and more recently through offering all capital note holders the opportunity totake 'vertical slices' of the portfolio. As a result, core assets have fallenfrom USD18.2 billion at the end of August to USD7.15 billion as at 24 January2008. Asset quality remains high with the weighted average rating on theportfolio being AA/Aa2 by S&P and Moody's. Existing capital note holders willcontinue to bear the first loss credit risk in the Whistlejacket assetportfolios. Further to the exchange of USD140 million of capital notes for a pro-rata sliceof Whistlejacket assets that Standard Chartered PLC announced in its Pre-closetrading update, Standard Chartered exchanged its residual USD143 million ofcapital notes for a second 'vertical slice' of Whistlejacket assets duringDecember 2007. This second representative portfolio of assets acquired amountsto approximately USD1.65 billion and is reflected in the Group's balance sheet.The 2007 earnings impact of the second slice was USD70 million. The total impactof these two 'vertical slices' resulted in a negative fair value adjustment,taken against income, of USD116 million in 2007. As a consequence of providing liquidity through the commercial paper facility,Standard Chartered will consolidate Whistlejacket Capital Limited for accountingpurposes, resulting in the remaining USD7.15 billion of Whistlejacket's coreassets being included on the Group's balance sheet. Standard Chartered does not anticipate that the provision of the commercialpaper facility will have a material impact on its 2008 earnings or capitalresources. If Standard Chartered had provided this funding to Whistlejacket asat 31 December 2007, Standard Chartered Group capital ratios would have remainedabove its target Tier 1 and Total capital ranges. Standard Chartered remainsstrongly liquid and following discussions with the rating agencies, does notanticipate any effect on the Group's credit ratings. Richard Meddings, Group Finance Director, commented, "The provision of thisfacility, once agreed by the investors, is the next step in resolving thefunding challenge faced by Whistlejacket in the current market conditions. Italso demonstrates Standard Chartered's capital and liquidity strength." For further details please contact: Standard Chartered Stephen Atkinson, Head of Investor Relations Tel: +44 (0) 20 7280 7245 [email protected] Arijit De, Head of Media Relations Tel: +44 (0) 20 7280 7163 [email protected] Note to Editors: Standard Chartered - leading the way in Asia, Africa and the Middle East Standard Chartered PLC, listed on both the London Stock Exchange and the HongKong Stock Exchange, ranks among the top 25 companies in the FTSE-100 by marketcapitalisation. The London-headquartered group has operated for over 150 yearsin some of the world's most dynamic markets, leading the way in Asia, Africa andthe Middle East. Its income and the number of employees have more than doubledover the last five years primarily as a result of organic growth andsupplemented by acquisitions. Standard Chartered aspires to be the best international bank in its markets bybeing the right partner for its stakeholders and leading by example. The groupnow employs over 60,000 people, representing some 100 nationalities, in morethan 1,400 branches located in over 50 countries. The bank generates more than90 per cent of its profits from Asia, Africa and the Middle East, with balancedincome derived from both Wholesale and Consumer Banking. The group is committed to building a sustainable business over the long term andis trusted worldwide for upholding high standards of corporate governance,social responsibility, environmental protection and employee diversity. For moreinformation, please visit: www.standardchartered.com This announcement includes forward-looking statements. Such forward-lookingstatements involve known and unknown risks and uncertainties which could causethe actual results or performance of Standard Chartered PLC to be materiallydifferent from future results or performance expressed or implied by suchforward-looking statements. These forward-looking statements speak only as atthe date of this announcement. Standard Chartered PLC expressly disclaims anyobligation or undertaking to disseminate any updates or revisions to anyforward-looking statements contained herein to reflect any change in StandardChartered PLC's expectations with regard thereto or any change in events,conditions or circumstances on which any such statement is based. -- ENDS -- This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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