HSBC 2008 Annual Report Download - page 189

187
Third-party sponsored SPEs
Through standby liquidity facility commitments,
HSBC has exposure to third-party sponsored SIVs,
conduits and securitisations under normal banking
arrangements on standard market terms. These
exposures are quantified below.
HSBC’s commitments under liquidity facilities to
third-party SIVs, conduits and securitisations
Commit-
ments Drawn
US$bn US$bn
At 31 December 2008
Third-party SIVs .................. – –
Third-party conduits ............ 1.1 0.1
Third-party securitisations ... 0.6 0.1
1.7 0.2
At 31 December 2007
Third-party SIVs .................. 0.3 –
Third-party conduits ............ 4.4 0.4
Third-party securitisations ... 0.5 –
5.2 0.4
Other exposures to third-party SIVs, conduits and
securitisations where a liquidity facility has been
provided
At 31 December
2008 2007
US$bn US$bn
Derivative assets .................. – 0.2
Other off-balance sheet
arrangements and commitments
Financial guarantees, letters of credit and
similar undertakings
Note 40 on the Financial Statements describes
various types of guarantees and discloses the
maximum potential future payments under such
arrangements. Credit risk associated with all forms
of guarantees is assessed in the same manner as
for on-balance sheet credit advances and, where
necessary, provisions for assessed impairment are
included in ‘Other provisions’.
Commitments to lend
Undrawn credit lines are disclosed in Note 40 on
the Financial Statements. The majority by value of
undrawn credit lines arise from ‘open to buy’ lines
on personal credit cards, advised overdraft limits
and other pre-approved loan products, and
mortgage offers awaiting customer acceptance.
HSBC generally has the right to change or
terminate any conditions of a personal customer’s
overdraft, credit card or other credit line upon
notification to the customer. In respect of corporate
commitments to lend, in most cases HSBC’s
position will be protected through restrictions on
access to funding in the event of material adverse
change.
Leveraged finance transactions
Loan commitments in respect of leveraged finance
transactions are accounted for as derivatives where
it is HSBC’s intention to sell the loan after
origination. Further information is provided on
page 160.