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Whistlejacket Downgraded, Other SIVs Affirmed, More Bailouts Coming? As expected, Standard & Poor's downgraded the debt of the Standard Chartered-sponsored SIVs Whistlejacket Capital Ltd. and White Pine Corp. Ltd. to 'D' (default). S&P also affirmed the ratings of a number of Citi-affiliated SIVs, as well as the AIG-affiliated Nightingdale SIV. Standard Chartered had previously said that it would back its structured vehicles, but the company withdrew its support following the SIVs move into receivership. Standard Chartered spokesman Tim Baxter tells us, "The situation evolved quite rapidly" to where the company "was no longer in control." The SIV, which Northern Trust said Friday is made up of high quality securities -- 65% AAA, 32% AA and 2% A-rated, had a higher NAV trigger than most. "There were limits on what we're allowed to do," says Baxter. On Friday, Northern Trust announced a capital support agreement to protect its money funds, STIFs and cash separate accounts. (See our "Northern Trust Provides Capital Support Agreement to Money Funds".) Several more fund advisors are expected to follow. Crane Data estimates that Whistlejacket, named for a famous racehorse (and cocktail), commercial paper (CP) and medium-term note (MTN) exposure totals about $4 billion in as many as 10 money funds. A December research piece by Bank of America analyst Michael Hecht identified a handful of advisors that held Whistejacket. The largest position was listed in Charles Schwab money market funds. However, Hecht noted Schwab as "seeing the sharpest drop-off in SIV exposure by year-end." Searches of EDGAR filings show Schwab's holdings may have matured. But one analyst tells us that many are actually medium-term notes which are likely still being held. We have attempted to contact Schwab but have yet to hear back.
