Rabobank bails out SIV by Finance News Bulletin

Published: 18/12/07

All era are London time Search News in the FTcom siteSearchSearch Quotes in the FTcom siteQuotesCOMPANIES Financial servicesBreadcrumb follow navigation:FT house > Companies > By sector > Financial servicesServicesRabobank on Thursday became the third store in the past two weeks to bail out a troubled structured asset vehicle in a further sign of the deteriorating circumstances in the financial marketsThe Dutch bank plans to take possessions worth €5

2bn ($76bn) on to its balance sheet to prevent a fire auction of Tango FinanceThe bank, which manages the SIV with Citigroup, has already sold almost half the vehicle’s possessions because it could not find enough funding The SIV was worth €9

7bn in JulyStandard Chartered, the up-and-coming markets bank, and HSBC, the UK-listed bank, have also unveiled tactics to take the assets of SIVs on to their booksSIVs, which seek to profit from the difference between cheap short-term financial support in the commercial paper markets and the higher returns on monetary company debt and multifaceted debt products, are one of the biggest casualties of the praise squeezeEddie Villiers, responsible for European sales at Rabobank, said: “The current SIV commerce model is dead and so there is no prospect of its survival in its current form

“Our decision has been made only for liquidity reasons as the assets in the portfolio are of high excellence, but there is no market for asset-backed profitable paper for SIVs We have done this for reputational reasons as our exposure to the SIV is little,” Mr Villiers saidRabobank holds €34m of the vehicle’s assets and has no lawful obligation to bail it out It plans to take the fund on to its balance sheet in January

Citigroup, which helped put up the SIV and provides back office armed forces, had not invested in the means of transportation A spokeswoman for Citigroup, which manages $66bn in its own SIVs, supposed: “Citigroup has no responsibility for the financial support of Tango”Last week HSBC took $45bn of assets detained in two vehicles – known as Cullinan and Asscher – on to its balance sheetThe actions being in use to support SIVs are reducing possible demand for the “superfund” about to be launched by Bank of America, Citigroup and JPMorgan Chase with support from the US Treasury

The fund, originally planned to be about $75bn, will present to buy assets from cash-strapped SIVs to stop fire sales The three lead banks have said they will go ahead with the fund even if support from other banks and insist from SIVs is less than originally expected Copyright The Financial Times incomplete 2007Legg Mason leader sees dire credit market - Dec-04Cheyne Finance vehicle do up - Dec-03Citi SIVs on Moody’s negative review - Dec-03HSBC in $45bn SIV post security - Nov-26Support for SIV superfund grows - Nov-18SIVs face brawl to survive, says Moody’s - Nov-09More from this sectorMaverick China Payment Profiles: 99Bill, burning Out of the Gates, but Sustainable Maverick porcelain Research12/3/2007$1000Maverick porcelain Payment Profiles: Chinapay, as long as Online Payment Solutions for Chinese Banks Maverick China Research12/3/2007$1000BlogsBrussels BlogCharles PretzlikClive CrookDear LucyEconomists’ ForumEnergy FilterJohn GapperGideon RachmanTech BlogThe in secret EconomistWestminster BlogWillem Buiter’s MavereconRegional pagesLatin American agendaChinaIndiaBrusselsInteractivePodcastsDebates & pollsAsk the expertMarkets Q&AJobs and classifiedsBusiness for saleContracts & tendersJobs look for Type your search criteria below:* Minimum holdup 15 minutesAll times are London timeFT HomeSite mapContact usHelpAdvertise with the FTMedia centreStudent offersFT ConferencesFT SyndicationCorporate subscriptionsFT GroupPartner sites: Chinese FT

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