Managed Multi-currency mortgages

Calculation Methodology

Average Interest Rate Bar Charts

Since 1988 ECU has managed hundreds of multi-currency loan facilities at over 20 banks, with differing terms of business which have evolved over time.

These charts have been created using actual foreign exchange transaction data which, subject to the notes below, is consistent with all foreign exchange transactions executed by ECU on all GBP benchmark managed multi-currency loans during the period.

These charts illustrate the interest paid on a GBP benchmark multi-currency loan facility managed by ECU with interest being charged at 1.75% above the weekly closing 7-day inter-bank cost of funds applicable to the currencies borrowed compared with the cost of borrowing at a GBP 7-day LIBOR rate plus 1.75% for the periods of time specified in the individual bar charts.

Interest Differential

Interest differential is calculated as the difference between the interest which would have been paid on a GBP loan at a rate of 1.75% above the weekly closing 7-day inter-bank GBP LIBOR rate, and the interest payable in the currency(ies) in which the loan has been denominated at a rate of 1.75% above the weekly closing 7-day inter-bank LIBOR rate applicable to those currencies. An interest saving is shown as positive performance. An interest loss is shown as negative performance.


Daily interest is calculated at a rate of 1.75% above the weekly closing 7-day inter-bank interest rates for borrowed money in the relevant currencies divided by 360 for all currencies except GBP, which is divided by 365.

Underlying Transaction Data

Some of the historical ECU-managed, multi-currency loan facilities were provided by banks that no longer exist or have been sold or merged. As a result, independent verification of historical data is not always possible. ECU's trading instructions to all banks are identical save only three main respects: (a) the amounts vary from bank to bank; (b) although they are given at broadly the same time, it may not have been possible to instruct or execute with all banks simultaneously; and (c) two of the lending banks that historically provided multi-currency loan facilities to ECU's clients were unable to place debt in more than one currency at a time.

From November 1988 to December 2009, the performance data is based on actual foreign exchange transactions executed for clients at Royal Trust Bank of Canada, who were then taken over by Kleinwort Benson Private Bank and subsequently by Kleinwort Benson (Channel Islands) Ltd. From January 2010, the performance is based on actual foreign exchange transactions executed for clients at HSBC. ECU believes this to be representative of the capital and interest rate savings of a £1m multi-currency loan managed by The ECU Group plc over these periods. The trading and performance data of ECU's multi-currency debt management programme is periodically reviewed by independent accountants

 

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