EFTA01166539

From: Peter Mandelson To: " " <jeevacation@gmail.com> Subject: FW: purchase Date: Sun, 10 Jul 2011 16:50:17 +0000 Attachments: PM_Loan_Options-xls.zip From: mark niall Date: Wed, 6 Jul 2011 15:57:34 +0100 To: Peter Mandelson Subject: Re: purchase Peter, I am currently going through the process of seeking approval for a loan of up to £4.5m. I very much hope that this figure is a worst case scenario and that you will only need somewhere closer to £4m, I have made some assumptions, which are detailed in the attached spreadsheet. You can change these as you see fit but, the headline figures are a purchase price of £7.6m, sale price of £2.6m and your cash input of £1.05m. The current interest cost will be in the region of £150k p.a. (based on a 'floating" rate), so this is affordable based on your projected income of c. £700k gross of tax (and assuming no tax increases), but interest rates will go up at some point, the question is when. For you, a rate in excess of 5.5-6% p.a. would lead to difficulties in covering the interest, and this is something we need to address if I am to obtain approval. There are many ways to hedge/mitigate the risk of rising interest rates, and ultimately your strategy will be driven by your expectations regarding interest rates and personal income. In the attached spreadsheet I have also included some indicative costs for fixing the rate and using an interest rate cap (which allows you to "float" up to a predetermined ceiling - i.e you will never pay more than, say 6%p.a.). However, in view of the up front cost of hedging, you might prefer to agree to an arrangement whereby you lodge with the Bank, as security for the loan, a cash deposit equivalent to the prevailing projected one year interest cost. The required amount would be reviewed every 6 months. As at today, this would be 4.08%, or £184k based on £4.5m. This sum would remain charged to the Bank and you would pay interest out of your own cash reserves/income in the normal way. As I said, ultimately it's your decision and you may wish to take advice from James. I am of course happy to meet you both to discuss further and look forward to hearing from you. Best wishes Mark I-ISBC Private Bank Mark NIALL DIRECTOR I Media & Entertainment Group An Award winning service - find out more about our 2010 accolades at: EFTA01166539 From: Peter Mendelson To: Mark Date: 05/07 Subject: Re: purchase Thanks From: (mailto:' Sent: Tuesday, July 05, 2011 12:18 PM To: Peter Mandelson Subject: Re: purchase Peter, I am seeking credit approval. I have an "amber" light but approval is by no means guaranteed. I am hopeful that we will be given the green light within a few days but it's your decision as to how best to proceed in the meantime. Best wishes Mark I ISBC Private Bank Mark NIALL An Award winning service - find out more about our 2010 accolades at : From: Peter Mendelson To: Mark NI Date: 05/07/2 Subject: purchase Mark, I took our conversation re mortgage offer as a green/amber light. Sd I now try and negotiate best price for St Katharine's house and at same time start marketing Park Village West ? Peter liSBC Private Bank (UK) Limited EFTA01166540 SAVE PAPER - THINK BEFORE YOU PRINT! This E-mail is confidential. It may also be legally privileged. If you are not the addressee you may not copy, forward, disclose or use any part of it. If you have received this message in error, please delete it and all copies from your system and notify the sender immediately by return E-mail. Internet communications cannot be guaranteed to be timely, secure, error or virus-free. The sender does not accept liability for any errors or omissions. HSBC Private Bank (UK) Limited Authorised and regulated by the Financial Services Authority SAVE PAPER - THINK BEFORE YOU PRINT! This E-mail is confidential. It may also be legally privileged. If you are not the addressee you may not copy, forward, disclose or use any part of it. If you have received this message in error, please delete it and all copies from your system and notify the sender immediately by return E-mail. Internet communications cannot be guaranteed to be timely, secure, error or virus-free. The sender does not accept liability for any errors or omissions. EFTA01166541