Rating rationale contd. Assessment contd. * Funding is unusually prudent in that, as a matter of policy, its overall maturity is longer than the loan book. It is also a policy of CBL to fund the loan book from committed facilities and equity. * Derivatives are only used to hedge interest rate exposure and it is policy not to take positions in derivatives, currencies or bonds for proprietary gain. Market risk in the market-making business also appears well controlled and relatively limited. * CBG, whose BIS/G10 total capital ratio was a strong 24% at end-July 2001, had more than twice the capital of CBL, leaving scope for future acquisitions or organic business growth.   Support * CBL is wholly owned by CBG. CBG's largest shareholder (18.6%) is Caledonia Investments plc (CI), a quoted investment company, whose largest shareholder is the Cayzer family. * In the event of CBL running into difficulties, in our view, support would be provided by CBG, although this cannot be relied upon. CI, as a "controlling shareholder" under the Banking Act, has also provided the Bank of England with a letter of comfort in respect of CBL.   Background * CBL, established in 1878, is the principal operating subsidiary of a diversified UK investment banking group, CBG. * CBL and its subsidiaries are involved in lending in specialist sectors including printing machinery, cars, insurance premium financing and property, as well as debt factoring and treasury activities. * The other principal CBG subsidiaries are involved in quoted small company market-making (Winterflood Securities), asset management and corporate finance.