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Alliance & Leicester ‘open’ over US sub-prime exposure

Alliance & Leicester has made an update on the London Stock Exchange in a bid to calm investors’ fears over its exposure to the US sub-prime crisis.

This comes just a week after A&L head of specialist mortgages Jeremy Claridge told Money Marketing that lenders must be more open about their exposure to the US sub-prime crisis and that the market is spooked because lenders have not been open enough.

A&L says it has invested about £390 m in a variety of structured investment vehicles although it says that only a small proportion was exposed to potential losses.

The bank also said it was operating a conduit facility totalling about £770m, invested in a variety of structured credit assets, including collateralised debt obligations and collateralised loan obligations.

A&L says its exposure to highly structured credit products containing US sub-prime mortgages was £175 million. A&L added: “Current conditions in the funding and liquidity markets have had no material impact on either profits or franchise growth.”

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