CONFIDENTIAL
052677
MDHOAN 80
5. WE SHOULD THEREFORE BE GRATEFUL IF YOU COULD AGAIN DISCUSS THE POSSIBILITIES WITH ONE OR TWO LOCAL BANKS AND/OR INSURANCE COMPANIES, WITH A VIEW TO PROVIDING A SPECIFIC ILLUSTRATION OF WHAT MIGHT BE TECHNICALLY FEASIBLE AND WHAT IT MIGHT COST: (A) IF THE LENDER WERE TO BEAR BOTH THE EXCHANGE-RATE RISK AND THE POLITICAL RISK OF DEFAULT BY HKG OR THE SARG: OR
(B) IF HMG WERE TO OFFER A GUARANTEE AGAINST THE RISK OF DEFAULT.
6.
NO DOUBT THE INSTITUTIONS WILLINGNESS TO LEND AT FIXED RATES OVER EXTENDED PERIODS WILL PARTLY DEPEND ON THE SIZE OF THE FACILITY: IT WOULD THEREFORE BE HELPFUL IF THEY COULD WORK ON FIGURES REPRESENTING THE AMOUNTS REQUIRED IF ALL HMOCS. OFFICERS DUE TO RETIRE IN THE PERIOD SOUGHT TO BORROW THE FULL COMMUTABLE SUM PAYABLE UNDER THE NEW PENSIONS SCHEME. (FOR REASONS OF CONFIDENTIALITY YOU MIGHT PREFER TO GIVE THEM THE FIGURES WITHOUT SPECIFYING THE HMOCS ASPECT: IE THEY MIGHT JUST BE FOR A CROSS-SECTION OF SENIOR CIVIL SERVANTS).
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7. IF THE INSTITUTIONS ARE PREPARED TO QUOTE FOR LONGER PERIODS THAN 10 YEARS, WE SHOULD NATURALLY WELCOME THE COMPARATIVE FIGURES.
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8. WE CAN MAKE OUR OWN-ASSESSMENT OF WHAT RETURN MIGHT REASONABLY BE EXPECTED OVER THE PERIOD OF THE LOAN, IF THE SUM*** RAISED WERE INVESTED IN THE UK OR USBUT IT WOULD BE HELPFUL. TO KNOW WHAT TERMS THE LENDING INSTITUTIONS MIGHT OFFER IF THE SUMS WERE TO BE INVESTED IN AN OFFSHORE FACILITY OF THEIR OWN.
9.
WE HOPE THAT, IN VIEW OF PAST DISCUSSIONS, YOUR CONTACTS WILL BE ABLE TO PROVIDE SOME ILLUSTRATIVE EXAMPLES QUITE QUICKLY (TWO TO THREE WEEKS?) THE SOONER WE CAN FINALISE OUR OPTIONS PAPER
RETURN TO THE CHARGE AT MINISTERIAL LEVEL.
THE SOONER WE CAN
HURD
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