Rabobank announces that it has agreed a plan to take assets of Structured Investment Vehicle Tango Finance onto its balance sheet
6-12-2007 | Press Releases
Rabobank has today announced that it has agreed a plan which, on full implementation, would result in the Dutch bank taking the remaining assets of Tango Finance Limited (Tango), a Structured Investment Vehicle (SIV) that it sponsors, onto its balance sheet.
Tango, in common with all SIVs, has faced funding challenges in recent months. Despite market conditions, it has funded itself successfully until late January 2008 through a combination of asset sales, repo transactions and allowing income note investors to redeem income notes in exchange for buying portfolios of assets. As a result, Tango now has €5.2 billion in cash assets, down from €9.7 billion in July. The Tango portfolio is high quality with only minimal exposure to Collateralised Debt Obligations of Asset Backed Securities (CDOs of ABS) and US sub-prime mortgages.
Rabobank believes there is no immediate prospect of the funding situation for SIVs improving in 2008. To prevent a potential fire sale of high quality assets, the bank has announced that it is prepared to take the remaining assets of Tango onto its balance sheet in early 2008.
Sipko Schat, a member of the Executive Board of Rabobank, said: “Rabobank plans to take the assets of Tango onto its balance sheet. This will have no material effect on our strong solvency position given the size of the portfolio and the high quality of the assets.”
Rabobank has already had initial discussions with income note investors and intends to conduct meetings with all income note investors over the coming weeks, with a view to executing the plan early in 2008.
For more information:
Raymond Salet, Head of the Rabobank Group Press Office: +31 613 748469
Andrew Newsham, Rabobank International London: +44 (0) 7901 670316
Nick Denton, Partner, The Hogarth Partnership: +44 (0) 7770 272083
