|(MBS) MONARCH-BACKED SECURITY|
Yesterday's Jubilee caused great jubilation, or at least that's what BBC was saying. I kind of missed it, but I did think it was fitting to at least commemorate the occasion by writing a modest proposal in Bright Green Scotland, entitled Securitise the Queen.
I proposed that the British Government issue Monarch-backed securities. Here's a quote:
"Monarch-backed securities are innovative new financial instruments that will securitise the Queen, using her as collateral against which the government can borrow money...
...The technicalities of the monarch-backed sovereign debt could be ironed out fairly quickly. We put the Queen into an SPV (a special purpose vehicle, of financial crisis fame), which issues 20-year bonds to investors. The SPV is bankruptcy remote, which means that if the entity defaults, the investors can claim the Queen, but no government assets. Of course we tranche the returns: Risk-averse investors take the upper tranches, backed by the stable cash flows of the Queen’s ordinary tourist revenue. Hedge funds take the risky lower tranches, betting on the volatile residual returns from Royal event licensing rights, such as a wedding or funeral."
Indeed. The only reason I wrote this is because I'm South African, and South Africa is part of the Commonwealth, so apparently I have to have pledge alliegence to the Queen lest the British authorities revoke my visa. I suppose the proposal was slightly unorthodox, but I felt the Queen would take it in the right spirit.
I contacted the Crown office this morning for comment. The Queen was harbouring a cold, and couldn't chat on the phone, but she sent me an email saying: "One thinks that Mr Scott's proposal is very robust and laudable. One's only wish is that one's corgies get their own little SPVs".
Sure thing ma'am.