Barclays 2003 Annual Report Download - page 137

15 Loans and advances to customers (continued)
Securitised transactions
Loans and advances to customers include balances which have been securitised. These balances are either accounted for on the basis of linked
presentation or separate recognition of the gross assets and related funding.
Linked presentation
Banking business loans and advances to customers include loans subject to non-recourse finance arrangements which at 31st December 2003 and
2002 comprised a portfolio of mortgage loans. The principal benefits of these loans were acquired from the Bank by a special purpose securitisation
vehicle which was funded primarily through the issue of floating rate notes. Barclays PLC and its subsidiary undertakings are not obliged to support
any losses that may be suffered by the floating rate noteholders and do not intend to provide such support. Additionally, the floating rate notes
were issued on the basis that noteholders are only entitled to obtain payment, as to both principal and interest, to the extent that the securitisation
vehicle’s available resources, including funds due from customers in respect of the securitised loans, are sufficient and that noteholders have no
recourse whatsoever to the Group.
The securitisation company involved is Millshaw SAMS (No. 1) Limited. All the shares in Millshaw SAMS (No. 1) Limited are held beneficially by
Millshaw SAMS Holdings Limited. All the shares in Millshaw SAMS Holdings Limited are held by Royal Exchange Trust Company Limited. The Group
does not own, directly or indirectly, any of the share capital of Millshaw SAMS (No. 1) Limited or its parent companies. The Bank has made an interest
bearing subordinated loan to Millshaw SAMS (No. 1) Limited repayable on final redemption of the floating rate notes.
The Bank received payments from the securitisation companies in respect of fees for loan administration services, and also under the terms of the
subordinated loan agreement. The Bank has no right to repurchase the benefit of any of the securitised loans and no obligation to do so, other than
in certain circumstances where the Bank is in breach of warranty. The personal mortgage loans subject to non-recourse finance are as follows:
Outstanding at 31st December 2003 Outstanding at 31st December 2002
Non- Funding Non- Funding
Customer returnable provided by Customer returnable provided by
loans finance the Bank(a) loans finance the Bank(a)
£m £m £m £m £m £m
81 80 1 84 83 1
Note
(a) Funding provided by the Bank includes £1m (2002: £1m) of subordinated loans.
Linked presentation has been applied for these loans and the net of the loans and finance is included within loans and advances to customers on the
balance sheet. The amounts involved in the linked presentation have not been shown on the face of the balance sheet because they are not deemed
to be significant.
Gross assets presentation
In 2003 and 2002, a proportion of the Barclaycard personal credit and charge card receivables portfolio in the UK was securitised. The noteholders
in this securitisation have a proportionate interest in each balance in the portfolio and at 31st December 2003 the value of this interest was
£2,508m (2002: £644m). The total portfolio is included within gross loans and advances and in Note 58, and the funding giving rise to the noteholders
interest is included within Debt securities in issue (Note 28).
During 2003, a portion of the residential mortgage portfolio of Barclays Bank S.A. in Spain was also securitised. The sterling equivalent at
31st December 2003 of the mortgages securitised was £1,085m. The total portfolio is included within gross loans and advances and in Note 58, and the
funding giving rise to the noteholders interest is included within Debt securities in issue.
Barclays PLC Annual Report 2003 135