Skipton Building Society, with GBP6.6 billion (USD10.68 billion) in assets, is planning to begin using foreign exchange swaps for its GBP1.5 billion medium-term note program later this year. Richard Dickinson, balance sheet risk manager in Skipton, U.K., said the thrift funds its lending portfolio entirely in sterling, but would like to diversify its funding base and reduce costs by issuing in foreign currencies and using fx swaps to convert proceeds into sterling-denominated liabilities.
The society is setting up a settlement system to execute swaps and is speaking to firms about providing the instruments, said Richard Green, treasury analyst in Skipton, U.K. He declined to name firms it has approached. The company is also putting International Swaps and Derivatives Association documentation in place to facilitate executing swaps.
Dickinson said the thrift has GBP600 million outstanding in its MTN program, but recently upped the program's capacity to GBP1.5 billion from GBP750 million. He explained that issuance this year would depend on demand for its lending products. "We decided to expand it for use when we need it," he said. Skipton Building Society is a subsidiary of Skipton Group, which has assets of GBP6.7 billion.
