Granite is a
securitisation vehicleSecuritization is a structured finance process that distributes risk by aggregating debt instruments in a pool, then issues new securities backed by the pool. The term "securitization" is derived from the fact that the form of financial instruments used to obtain funds from the investors are...
created by the British bank
Northern RockNorthern Rock plc is a British bank, under public ownership from 2008. It is based at Regent Centre in Newcastle upon Tyne in North East England in the United Kingdom...
, based in
GuernseyThe Bailiwick of Guernsey is a British Crown Dependency in the English Channel off the coast of Normandy.As well as the island of Guernsey itself, it also includes Alderney, Herm, Jethou, Brecqhou, Burhou, Lihou, Sark and other islets. Although the defence of all these islands is the...
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Granite is a
securitisation vehicleSecuritization is a structured finance process that distributes risk by aggregating debt instruments in a pool, then issues new securities backed by the pool. The term "securitization" is derived from the fact that the form of financial instruments used to obtain funds from the investors are...
created by the British bank
Northern RockNorthern Rock plc is a British bank, under public ownership from 2008. It is based at Regent Centre in Newcastle upon Tyne in North East England in the United Kingdom...
, based in
GuernseyThe Bailiwick of Guernsey is a British Crown Dependency in the English Channel off the coast of Normandy.As well as the island of Guernsey itself, it also includes Alderney, Herm, Jethou, Brecqhou, Burhou, Lihou, Sark and other islets. Although the defence of all these islands is the...
.
The purpose of Granite is to parcel up the mortgages provided by the bank and sell the value to investors. Granite has a value of around £45 billion.
Northern Rock, advised by
Credit SuisseThe Credit Suisse Group is a financial services company, headquartered in Zurich, Switzerland. Credit Suisse was founded by Alfred Escher in 1856 under the name Schweizerische Kreditanstalt . The bank is organized into three divisions, Investment Banking, Private Banking, and Asset Management...
, have decided to let Granite go into run-off, meaning that Northern Rock the bank will no longer supply it with fresh mortgages and bondholders will be repaid as old mortgages expire.
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