Funding Santander UK plc
Under the subsidiary model, Santander UK plc primarily generates funding and liquidity through UK retail and corporate deposits, as well as in the financial markets through its own debt programmes and facilities to support its business activities and liquidity requirements. It does this in reliance on the strength of its balance sheet and profitability and its own network of investors. It does not rely on a guarantee from Santander or any other member of the Santander Group to generate this funding or liquidity. Santander UK plc does not raise funds to finance other members of the Santander Group or guarantee the debts of other members of the Santander Group (other than certain of its own subsidiaries).
Santander UK plc has a strong wholesale funding base, which is diversified across product types and geography. Through the wholesale markets, Abbey National Treasury Services plc (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. Please see below for further information on ANTS. 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 committed 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 ANTS euro medium-term note programmes. The major debt issuance programmes are managed by ANTS on its own behalf (except for the US commercial paper programme, which is managed by Abbey National North America LLC, a guaranteed subsidiary of the Company).
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. Please see section below on the Bank of England's Special Liquidity Scheme facility.
The ability to sell assets quickly is also an important source of liquidity for Santander UK plc. 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 and covered bond arrangements to provide alternative funding sources.
Securitisation of assets and covered bonds
Santander UK plc remains a consistent issuer in a number of secured funding markets, in particular securitisations and covered bonds. Santander UK plc has provided prime retail mortgage-backed securitised products to a diverse investor base through its mortgage-backed funding programmes where funding has historically been raised via mortgage-backed notes issued to third parties. Santander UK plc has also raised funding via retained issuance, which is central bank eligible collateral, at the Bank of England's Special Liquidity Scheme. Please see section below on the Bank of England's Special Liquidity Scheme. Santander UK plc also maintains a stock of retained issuance for contingent funding purposes in other Bank of England, Swiss National Bank, and US Federal Reserve facilities.
Debt Issuance Programmes
The major debt issuance programmes which 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:
- US$ 20bn EMTN
- US$ 10bn ECP (London)
- US$ 20bn CP (US, ANNA)
- €10bn Note, Certificate and Warrant Programme
- €35bn covered bond
For any enquiries on the above programmes, please contact:
Capital Markets: Sarah Robinson +44 (0) 20 7756
Securitisation and Covered Bonds: Tom Ranger +44 (0) 20 7756 6303 Structured Investments: Roland Steere +44 (0) 20 7756 7000
For details on Santander UK plc's securitisation and covered bond programmes, please view the following sites:
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. ANTS is a fully integrated division and presents the face to the wholesale markets on behalf of all of Santander UK plc's businesses.
Please see below for the guarantees:
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 exchanged self-subscribed-for asset-backed security issuances for highly liquid Treasury Bills. All major UK banks and building societies were required to participate as part of the measures designed to improve the liquidity position of the UK banking system in general. Under the terms of the scheme the extent of usage is confidential. The remaining balances outstanding under the Special Liquidity Scheme were repaid in January 2012. Santander UK plc did not participate in other voluntary UK Government backed schemes; namely the Credit Guarantee Scheme and the Asset Purchase Scheme.
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 HM 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.
For any queries on any of the above, please contact:
James S Johnson +44 (0) 20 7756 5014
Head of Investor Relations