Barclays 2010 Annual Report Download - page 111

Debt Securities
Credit Quality of Debt Securities (audited)
Trading portfolio assets, financial assets designated at fair value and available for sale assets are measured on a fair value basis. The fair value will reflect,
among other things, the credit risk of the issuer.
Most listed and some unlisted securities are rated by external rating agencies. The Group mainly uses external credit ratings provided by Standard & Poor’s
or Moody’s. Where such ratings are not available or are not current, the Group will use its own internal ratings for the securities.
Included in the table below are impaired available for sale debt securities with a carrying value at 31st December 2010 of £358m (2009: £265m), after
a write down of £583m (2009: £692m). Collateral is not generally obtained directly from the issuers of debt securities. Certain debt securities may be
collateralised by specifically identified assets that would be obtainable in the event of default.
Debt securities and other bills increased by £20.5bn, with the most significant increases relating to investment grade government securities. Securities
rated as sub-investment grade increased by £2.1bn, reflecting the receivable arising as part of the acquisition of the North American business of Lehman
Brothers, moving from loans and advances to available for sale assets.
Securities rated as investment grade amounted to 93.0% of the portfolio (2009: 91.8%). An analysis of the credit quality of the Group’s debt securities
is set out below:
Debt securities (audited) 2010 2009
As at 31st December
AAA to BBB-
(investment
grade)
£m
BB+ to B
£m
B- and
below
£m
Total
£m
AAA to BBB-
(investment
grade)
£m
BB+ to B
£m
B- and
below
£m
Total
£m
Trading portfolio 130,744 6,663 1,833 139,240 119,138 5,346 2,036 126,520
Financial assets designated at fair value 942 644 332 1,918 2,200 1,791 16 4,007
Available for sale financial investments 55,107 2,022 2,500 59,629 44,233 5,055 519 49,807
Total debt securities 186,793 9,329 4,665 200,787 165,571 12,192 2,571 180,334
% of total 93.0% 4.7% 2.3% 100.0% 91.8% 6.8% 1.4% 100.0%
Debt securities 2010 2009
As at 31st December £m % £m %
Of which issued by:
Governments and other public bodies 107,922 53.7% 88,083 48.8%
US agency 30,048 15.0% 23,924 13.3%
Mortgage and asset-backed securities 13,993 7.0% 17,826 9.9%
Corporate and other issuers 47,321 23.6% 41,641 23.1%
Bank and building society certificates of deposit 1,503 0.7% 8,860 4.9%
Total 200,787 100.0% 180,334 100.0%
Debt securities include government securities held as part of the Group’s treasury management portfolio for asset and liability, liquidity and regulatory
purposes and are for use on a continuing basis in the activities of the Group. The Group held the following government securities which exceeded 10%
of shareholders’ equity in any of the last three years. These securities are held at fair value.
Government securities 2010 2009 2008
As at 31st December Book value
£m
Book value
£m
Book value
£m
United States 25,553 17,356 17,165
United Kingdom 21,999 6,892 8,193
Japan 7,210 7,609 9,092
Spain 6,573 4,948 3,647
Italy 6,443 6,297 6,091
Germany 3,008 9,698 5,832
Barclays PLC Annual Report 2010 www.barclays.com/annualreport10 109
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