The Wall Street Journal-20080212-Standard Chartered-s SIV Plan Collapses

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Standard Chartered's SIV Plan Collapses

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A WSJ News Roundup

LONDON -- Standard Chartered PLC's plan to provide more than $7 billion in backing to a structured investment vehicle fell through as deeper losses in the underlying assets forced it to appoint a receiver for the vehicle.

Standard Chartered, a U.K.-based bank that does most of its business in Asia, said Whistlejacket, an SIV it manages and sponsors, breached its capital-note net asset value of 50% due to a fall in the value of its assets. That led to a so-called enforcement event, which requires the appointment of a receiver, who decides whether to seek further funding or sell fund assets to pay back debt.

The bank announced Jan. 31 that it planned to provide $7.15 billion of liquidity to support Whistlejacket.

The bank will discuss alternative liquidity arrangements with the receiver and said the assets hold good long-term value.

Standard Chartered said neither the enforcement action nor any future liquidity arrangements will have a material impact on its 2008 earnings or capital.