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Jun 29, 2005

BIMCO Manager: Securitisation concept was beneficial

Story PictureBefore breaking for lunch, the Senators would also hear statements from the Governor of the Central Bank, Sydney Campbell. Campbell’s contribution focused mainly on the bank’s technical role in crediting the millions of dollars sent to the S.S.B.’s account at the Central Bank for the St. James mortgage flows, via the Hibernia National Bank in the United States. It is understood that an arrangement was in place that the U.S. dollar transfers were sold to the bank and credited to the Social Security account in Belize dollars.

The fourth person to take the hot seat in the House today was the former manager of BIMCO, the Belize Investment Mortgage Company, Ian McMillan, who acted as the securitisation manager in both the Eastern Caribbean and North American securitisation programmes. McMillan walked the Senators through the benefits of these complex international financial transactions.

Ian McMillan, Securitisation Manager
?The liquidity enjoyment if you will that would have been allowed under a successful securitisation programme would have had its benefits to Belize that would have resulted in or allowed for the ordinary person on the street, I don?t like to use the word ordinary, the average person on the street to be able to go into their local institution and access capital. Capital would not have been a problem.?

Godwin Hulse
?In previous testimony from other parties, including the former chairman of the D.F.C., it was suggested that in fact the emphasis was basically as far as bond holders were concerned, on repay-ability, which was guaranteed by government, sovereign guaranteed and insurances and the collateral did not matter. In fact to paraphrase one of the statements made, it could have been a panades shop and it would have been acceptable because in this document this was simply a placement memorandum which was a prospectus and it was all over the place for people to buy into it; could not be perfected in a hundred percent.?

Ian McMillan
?If that is what this committee understands those statements to be, then respectfully, I?ll have to say that was or is utter nonsense. The transaction focused primarily on the collateral.?

?Remember, Belize?s first time into the markets, first time into the markets with a cross-border rated transaction, nothing like that had come out of this region before and we were being observed by the markets itself. And to, you mention about the panades shop analogy and whether or not anybody could have just changed a project midstream prior to the consummation of the transaction. Yes, a borrower could have said, I want to change what I want to do…that?s entirely their prerogative.?

?But the lender being a part of this programme and being made aware of that change of intent would have had to, by agreement, advise the other participants that there has been a change in focus. To do otherwise would have been a direct contravention.?

?There would have been a tremendous conflict of interest, in my definition of conflict of interest. I?ve heard other definitions being banted about, but my definition of conflict of interest, which includes objectivity in judgement, there would have been a conflict of interest issue. And certainly there would have been conflict of interest issues being raised by prospective investors if it were that principals or folks on the board were facilitating financing or exploiting financing mechanisms, which would have questioned and as a consequence of that, making policy pronouncements with respect to this programme. There would have been on the part of those investors issues of objectivity, which some may describe as conflict of interest, with respect to what would have emanated from that.?

?If you want St. James, if you have mortgages that you are desirous of continuing to offer to the programme, it?s best that you deal with the S.S.B. situation.?

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