About Abbey
Debt Investors
Funding Santander UK plc
Santander UK plc is primarily funded by its commercial bank (retail and corporate) franchise, including retail and corporate deposits, attracted through a variety of entities. Around three quarters of commercial bank customer lending is financed by commercial bank customer deposits. The retail sources primarily originate from the retail bank savings business. Although primarily callable, these funds provide a stable and predictable core of liquidity due to the nature of the retail accounts and the breadth of personal customer relationships.
Where wholesale funds are required, Santander UK plc has a strong wholesale funding base via its wholly owned subsidiary, Abbey National Treasury Services plc (ANTS), which is diversified across funding types and geography. Through global wholesale markets, ANTS has active relationships with more than 500 counterparties across a range of sectors, including banks, central banks, other financial institutions, corporates and investment funds. Other sources of funding include collateralised borrowings, mortgage securitisations and long-term debt issuance. While there is no certainty regarding money market lines of credit extended to ANTS they are actively managed as part of the ongoing business. No guaranteed lines of credit have been purchased as such arrangements are not common practice in the European banking industry.
Short-term funding is accessed through money market instruments, including time deposits, certificates of deposit and commercial paper. Medium to long-term funding is accessed primarily through the stand-alone bond markets. In addition ANTS utilises, among other things, its euro medium-term note (EMTN) and covered bond programmes.
The ability to sell assets quickly is also an important source of liquidity. Santander UK plc holds marketable investment securities, such as central bank, eligible government and other debt securities, which could be disposed of, either by entering into sale and repurchase agreements, or by being sold to provide additional funding should the need arise. Santander UK plc also makes use of asset securitisation arrangements to provide alternative funding sources.
The Group has provided prime retail mortgage-backed securitised products to a diverse investor base through its mortgage backed funding programmes. Funding has historically been raised via mortgage-backed notes issued to third parties and more recently retained (being central bank eligible collateral, both via the Bank of England's Special Liquidity Scheme facility and for contingent funding purposes in other Bank of England, European Central Bank and US Federal Reserve facilities).
Debt Issuance Programmes
The major debt issuance programmes are managed by Abbey National Treasury Services plc on its own behalf, except for the US$ 20bn commercial paper programme which is managed by Abbey National North America LLC, a subsidiary of Santander UK plc, are shown below:
Programme
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US$ 15bn EMTN
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US$ 4bn commercial paper
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US$ 20bn commercial paper
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Euro 2bn structured notes
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Euro 25bn covered bond
For any enquiries on the above programmes, please contact:
Capital Markets: Sarah Robinson +44 (0) 20 7756 6900
Securitisation and Covered Bonds: Tom Ranger +44 (0) 20 7756 6303
For details on Santander UK plc's securitisation and covered bond programmes, please view the following sites:
Bank of England Special Liquidity Scheme
Along with other major UK banks and building societies, Santander UK plc participated in the Bank of England's Special Liquidity Scheme whereby it swapped self-subscribed-for asset-backed security issuances for highly liquid Treasury Bills. This facility was provided to all UK banks and building societies, without stigma, as part of the measures designed to improve the liquidity position of the UK banking system in general.
UK Government 2008 Credit Guarantee Scheme
In 2008, the UK Government announced details of its 2008 Credit Guarantee Scheme for UK incorporated banks and building societies debt issuance (CGS). The CGS forms part of the UK Government's measures intended to ensure the stability of the financial system.
The CGS provides for H.M. Treasury to guarantee specific debt instruments issued by eligible institutions up to the end of 2009. Eligible institutions (which must be either authorised UK deposit-takers or building societies) seeking to utilise this scheme must submit applications to HM Treasury and a fee will be payable by the relevant issuer for each guarantee granted. Santander UK plc is the eligible institution for the Group.
Santander UK plc has not issued debt instruments under the Credit Guarantee Scheme.
Abbey National Treasury Services plc
Except for the $20bn CP programme, the above mentioned debt issuance programmes are issued out of Abbey National Treasury Services plc (ANTS), a wholly owned and cross-guaranteed subsidiary of Santander UK plc. Abbey National Treasury Services plc is a fully integrated division and presents the face to the wholesale markets on behalf of all of Santander's businesses UK plc.
ANTS also owns Cater Allen International Ltd (CAIL), which benefits from a guarantee from Santander UK plc. CAIL is a broker dealer and principal intermediary specialising in securities financing, borrowing, lending repo and money market products. CAIL operates in the short end of the market, principally in the three year and under period and offers a mix of funding, liquidity and collateral management solutions to a broad wholesale client base.
For any queries on any of the above, please contact:
Geoff Carpenter +44 (0) 20 7756 6284
Head of Strategic Funding and Relationship Management
Email: geoff.carpenter@santander.co.uk