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would such a scheme be workable with an external guarantee in Hong Kong dollars in the case of
default?
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would the interest rate margin st necessary with such an external guarantee?
be
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should also be grateful if you could do a to quantify the known costs and let me know whether you would contemplate such a scheme running over a longer period of up to 10 years and if so on what terms.
There are two other areas on which I would appreciate your advice. A proposal for a purchase of receivables at a discounted rate and an exchange rate hedging mechanism. Under the receivables purchase proposal the Bank would "purchase" the commuted portion of the pension in advance but a discounted rate.
I should therefore be grateful to know, if and under what conditions the Bank might purchase a 5 or 10 year Hong Kong dollar receivable now.
The exchange rate hedging scheme would work on the basis that the Bank offered forward cover from 1 up to 10 years on the value of he commuted lump sum pension gratuity in Sterling. I am aware that there may be difficulties in obtaining forward cover for Hong Kong dollars, but I should be grateful to know on what terms and conditions this might be arranged and the amount of funds which the market might be able to take up for each duration.
In all cases I am referring to a small group of some 300 or so senior officers and a total of $600 to $700 million over a ten year period at 1991/92 prices.
I am sorry to trouble you yet again, but this is a difficult and important issue and I should be very grateful for your assistance.
Yours sincerely,
Houten
(Stuart Harbinson)
Secretary for the Civil Service