Barclays launches certificates to attack pounds 4bn property exposure
The Property Index Certificates will be privately placed with institutional investors, mainly pension funds, by BZW Investment Management. The value of the PICs will move in line with the existing Investment Property Databank Annual Index.
James Woodlock, managing director of BZW Investment Management, said that if property values rose, investors would gain while the bank's loss would be offset by write-backs of its provisions against doubtful property loans. If values fell, the bank would have less to pay back on maturity.
The initiative is designed to reduce the property element of Barclays' pounds 70bn UK loan portfolio while allowing it to continue lending to property companies.
Alan Brown, director of group credit policy, said property lending at the end of the 1980s had been too high at over pounds 5bn, and that although Barclays' exposure was decreasing it still had some way to go.
The PICs will be in minimum tranches of pounds 250,000 at maturities of two, three, four and five years. Investors will be offered an annual income, and repayment of capital on maturity, linked to the returns on the index.
Unlike the recent securitisation of mortgages and centralised personal loans by Barclays, the new scheme does not shift lending off the balance sheet.
View from City Road, page 27
- 1 Woman accidentally shoots herself in the head while posing for a selfie
- 2 Art Garfunkel: Paul Simon is a 'monster' with a Napoleon complex
- 3 Isis burns woman alive for refusing to engage in 'extreme' sex act, UN says
- 4 Female Muay Thai champion hustles coaches to give them a beating
Isis 'jihadi bride' claims forced sex with Yazidi girls is never rape because Koran condones it
Woman accidentally shoots herself in the head while posing for a selfie
Isis burns woman alive for refusing to engage in 'extreme' sex act, UN says
Puerto Rico, island of lost dreams: People are leaving the debt-hit territory in droves as near neighbour Cuba's star rises
16-year-old girl beaten and burned alive by lynch mob in Rio Bravo, Guatemala
As a white man, I'm surprised more women aren't tweeting the hashtag #KillAllWhiteMen
Scotland may have to leave the EU even if it votes to stay in, David Cameron confirms
The day that Britain resigned as a global power
Almost a third of school pupils believe 'Muslims are taking over our country', study claims
SNP fury as HS2 finds 'no business case' for taking fast train service to Scotland
Gay marriage 'Bert and Ernie' cake bakery found guilty of discrimination in Northern Ireland
iJobs Money & Business
£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...
£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...
£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...
£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...