expected interest accruals in sterling. To take
more explicit account of this, the formula set out
in para 3 of our telno 309 should now read after
"on that day or"
the amount held on 28 February plus the
sterling interest received during March which
is maintained in sterling plus the sterling
which, in accordance with your interpretation
of the accidental breach provision, was purch-
ased during March in order to comply with that
provision, whichever amount is lower. For
this purpose, valuation ...
4.
V
It follows, however, that we would not be
prepared to compensate on any extra amount of
sterling acquired as a result of topping-up over and
above that undertaken in March to rectify the end-
February position under your interpretation of the
accidental breach provision.
5. All this being said, we do of course appreciate
the difficulties you have faced in a period of
falling gilt prices. This is why we have been
prepared to accept a special basis for settlement
on the lines described above.
t