UK banking group HBOS has received many plaudits for its innovative financing in 2003. Deals have included covered bonds, securitization programmes and retail-driven tier 1 capital deals. When you have had to fund £55 billion of asset growth in the past 12 months alone, you are always going to be on the look-out for new funding methods. "In 2003 we had to fund this growth and lengthen wholesale maturities, but we didn't want to over issue in any sector," said HBOS head of funding and liquidity Tony Main at a Credit Suisse First Boston credit conference held in December.
Main said the next step for the UK's biggest mortgage and savings bank will be a big push into the structured medium-term note private-placement market. "We haven't done much on that, and we are analyzing what the swaps situation will be, but we reckon we could get $10 billion a year out of the market, which will reduce pressure on our vanilla senior debt." To aid this process, Main says HBOS is planning a moderate expansion in the US, although the bank is not planning dramatic asset growth. "We will do this mostly for better access to funding there rather than to load on new assets."