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| Peter Green (left) and Mark Winter: seeking greater control over the marketing and sales of Bradford & Bingley’s bonds |
It was not so long ago that Bradford & Bingley was an unloved, at least by the wholesale markets, former building society. The bank was maligned by investors’ poor understanding of the true nature of its business and was under pressure from the rating agencies for its business strategy, in particular its shift into specialist mortgage lending. Furthermore, following a precipitous drop in funds raised via deposit in 2003, its short-term rating was subsequently cut from A1 to A2 by Standard & Poor’s; Fitch reduced its long-term rating by one notch to A. “One impact of the S&P downgrade was to reduce the potential size of the market for B&B Eurobonds. We had already issued standalone securitizations and issued our first covered bond the week after the B&B rating adjustment,” says Peter Green, treasurer.
Bradford & Bingley re-engineered its retail funding both through the branch network and by the introduction of an internet offering. That has brought in about £2.5 billion of additional deposits in the past couple of years.