This article was originally published 20th January, 2009

On 19 January, 2009, the UK Government announced the details of a second support package for the UK banking sector in attempt to address current barriers to lending in the wholesale and consumer markets. The key measure in respect of securitisation is the guarantee scheme for ABS ("ABS Scheme"), which implements some of the recommendations of the Crosby Report published in November 2008.

ABS Scheme

In its announcement, the UK Government has published only limited information in respect of the ABS Scheme; although further details are to be announced by the Debt Management Office in due course.The main features of the ABS Scheme are as follows.

  • The ABS Scheme will commence in April 2009, subject to state aid approval.
  • The Government will, in consultation with issuers and investors, provide full or partial guarantees to eligible AAA-rated asset-backed securities, including mortgages and corporate and consumer debt, in an attempt to improve banks' access to wholesale funding markets and stimulate the flow of credit to consumers and corporations.
  • UK banks and building societies eligible to participate in the UK's current Credit Guarantee Scheme (which includes approved UK subsidiaries of foreign institutions) will be able to access the ABS Scheme, subject to fulfilling the ABS Scheme conditions.

To view this document in its entirety please click here

Sidley Austin LLP, a Delaware limited liability partnership which operates at the firm's offices other than Chicago, London, Hong Kong, and Sydney, is affiliated with other partnerships, including Sidley Austin LLP, an Illinois limited liability partnership (Chicago); Sidley Austin LLP, a separate Delaware limited liability partnership (London); Sidley Austin, a New York general partnership (Hong Kong); Sidley Austin, a Delaware general partnership of registered foreign lawyers restricted to practicing foreign law (Sydney); and Sidley Austin Nishikawa Foreign Law Joint Enterprise (Tokyo). The affiliated partnerships are referred to herein collectively as Sidley Austin, Sidley, or the firm.

This article has been prepared by Sidley Austin LLP for informational purposes only and does not constitute legal advice. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Readers should not act upon this without seeking professional counsel.