Northern Rock

House of Lords written question – answered on 1st April 2008.

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Photo of Lord Barnett Lord Barnett Labour

asked Her Majesty's Government:

Further to the Written Answer by Lord Davies of Oldham on 13 March (WA 253) regarding Granite, how much financial benefit Northern Rock has had as an economic beneficiary of the securitisation since it was formed.

Photo of Lord Davies of Oldham Lord Davies of Oldham Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

Northern Rock has received initial cash consideration for the mortgages it has sold to Granite, and may also be entitled to receive additional deferred consideration payments from time to time. Northern Rock also receives payments of principal and interest in respect of its "seller's share".

In addition, Northern Rock has entered into certain commercial arrangements with Granite, which provide additional economic benefits such as the cash flow provided by Granite's wholesale deposits with Northern Rock and the fees payable to Northern Rock in respect of servicing and cash management agreements.

Details of Northern Rock's revenues are set out in its published accounts.

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