HSBC 2008 Annual Report Download - page 180

HSBC HOLDINGS PLC
Report of the Directors: Impact of Market Turmoil (continued)
SPEs > SIVs and conduits
178
The revolving credit facilities of multi-seller
conduits will predominantly have expected average
lives with maturities of less than 12 months, but
typically have a range of 1 to 60 months.
Funding structure
Solitaire Other SICs Total SICs
Total multi-seller
conduits Total SIVs
Total
Provided
by HSBC Total
Provided
by HSBC Total
Provided
by HSBC Total
Provided
by HSBC Total
Provided
by HSBC
US$bn US$bn US$bn US$bn US$bn US$bn US$bn US$bn US$bn US$bn
At 31 December 2008
Capital notes .................... – – 0.9 – 0.9 – – – – –
Drawn liquidity
facility ........................... 2.4 2.4 – – 2.4 2.4 – – – –
Commercial paper ........... 17.2 8.3 10.5 10.4 27.7 18.7 12.9 2.1 – –
Medium-term notes ......... – – 3.4 3.4 3.4 3.4 – – 0.1 –
Term repos executed ........ 0.8 0.8 13.3 13.3 14.1 14.1 – – – –
20.4 11.5 28.1 27.1 48.5 38.6 12.9 2.1 0.1 –
At 31 December 2007
Capital notes .................... – – – – – – – – 1.3 –
Commercial paper ........... 23.0 7.8 – – 23.0 7.8 14.8 8.6 7.3 2.4
Medium-term notes ......... – – – – – – – – 23.2 5.3
Term repos executed ........ – – – – – – – – 8.7 8.2
23.0 7.8 – – 23.0 7.8 14.8 8.6 40.5 15.9
Weighted average life of the funding liabilities
Solitaire
Other
SICs
Total
SICs
Total
multi-seller
conduits
Total
SIVs
Years
Years Years
Years
Years
At 31 December 2008
CP funding ................................................ 0.1 0.2 0.1 0.1 n/a
MTN funding ............................................ n/a 7.3 7.3 n/a 0.1
At 31 December 2007
CP funding ................................................ 0.4 – – 0.1 0.5
MTN funding ............................................ – – – – 1.1
The majority CP and MTN funding issued by
the SIVs was repaid in full during 2008 using the
proceeds from the asset sales to the new SICs. The
MTNs matured in early 2009.
HSBC’s maximum exposure
Conduits
Mazarin
• HSBC is exposed to the par value of Mazarin’s
assets through the provision of a liquidity
facility equal to the lesser of the amortised cost
of issued senior debt and the amortised cost of
non-defaulted assets. At 31 December 2008,
HSBC’s exposure amounted to US$15.5 billion
(2007: n/a). First loss protection is provided
through the capital notes issued by Mazarin,
which are substantially all held by third parties.
• In addition, at 31 December 2008, HSBC held
1.3 per cent of Mazarin’s capital notes, which
have a par value of US$17 million (2007: n/a),
and a carrying amount of US$0.6 million
(2007: n/a).
Barion and Malachite
• These SICs are term funded by HSBC,
consequently HSBC’s primary exposure to them
is represented by the amortised cost of the debt
required to support the non-cash assets of the
vehicles. At 31 December 2008 this amounted
to US$11.7 billion (2007: n/a).
• First loss protection is provided through the
capital notes issued by these vehicles, which are
substantially all held by third parties.
• In addition, at 31 December 2008, HSBC held
3.53 per cent (2007: n/a) of the capital notes
issued by these vehicles which have a par value
of US$35 million (2007: n/a), and a carrying
amount of US$1.3 million (2007: n/a).