Granite (Northern Rock vehicle)

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Granite is a securitisation vehicle created by the British bank Northern Rock, based in Guernsey. After the liquidity crisis and subsequent Nationalisation of Northern Rock in February 2008 Granite was put into run-off to reduce exposure the British Taxpayer. When Northern Rock was split into a 'good' and a 'bad' bank in January 2010 Granite assets were to be held by the 'bad' bank Northern Rock (Asset Management).

History[edit]

The purpose of Granite was to parcel up the mortgages provided by the bank and sell the value to investors. In 2008 Granite had a value of around £45 billion.[1]

In 2008 Northern Rock, advised by Credit Suisse, decided to let Granite go into run-off, meaning that Northern Rock the bank would no longer supply it with fresh mortgages and bondholders would be repaid as old mortgages expire.[2]

In plans made public on 8 December 2009 certain wholesale deposits were to be held by the renamed assets company, Northern Rock (Asset Management) plc, on behalf of Granite.[3]

References[edit]

  1. ^ Aldrick, Philip; Griffiths, Katherine (2008-02-20). "The state of Northern Rock: anything but usual". London: The Daily Telegraph. Retrieved 2008-02-22. 
  2. ^ "Northern Rock calls it a day on Granite vehicle". The Financial Times. 2008-11-21. Retrieved 2008-11-22. 
  3. ^ "Government guarantee arrangements for Northern Rock plc" (PDF). HM Treasury. 2009-12-08. Retrieved 2009-12-09. 

External links[edit]