Bradford and Bingley Default

purch

want to remind me exactly what it is I am wishing for?

Far be it for me to assume anything, but

who is going to trust the government if they start allowing state institutions to default

I would love to see the effect this is going to have on soverign wealth funds buying up gilts and other UKPLC debt

Cant wait to see LIBOR and CABLE over the next 24 hours!

all tell a tale !!!

mbga9pgf

So, tell me purch, what am I wishing for exactly? Or are you posting cr*p yet again?

Masomnia

As I understood it the UK government only really took on the mortgage debt and didn't guarantee anything else, with savings going to Santander.

As far as I'm concerned the clue is in the interest rate, such a high rate makes it obvious the paper was dodgy in the first place, so investors have no one else to blame; and the British tax payer should not have to pay out under those circumstances on an insolvent company's debt.

kennyboy66_2

Generali wrote: »

Isn't the point that the UK govnerment agreed (on the face of things) to guarantee the liabilities of B&B? Perhaps I'm misunderstanding things but I;m pretty sure that's what was said at the time.

http://www.hm-treasury.gov.uk/press_98_08.htm

see section - exclusion from scope.

I wonder what this paper was trading at before this announcement.

purch

So, tell me purch, what am I wishing for exactly?

Using my immense powers of perception:-

I would love to see the effect this is going to have on soverign wealth funds buying up gilts and other UKPLC debt

...........means you would love to see the SWF's buying loads more of our Debt, thus driving prices higher and yields lower, and making the chances of a UK Gov default totally unlikely.

Cant wait to see LIBOR and CABLE over the next 24 hours!

........means you can't wait, and the excitement is making you wet your underwear in anticipation of LIBOR's dropping and Cable getting every stronger.

Am I close ??

bubblesmoney

purch wrote: »

And they also changed a number of the T&C's on this paper too, including what constitutes a default.

http://www.opsi.gov.uk/si/si2008/pdf/uksi_20082546_en.pdf

that link seems to have the following mentioned as well.

(3) A default in the payment of any principal due in respect of a dated subordinated note—(a) shall not constitute an event of default under the note;

!!!!!! is that (the bit in red) supposed to mean. are they trying to say even if they default on the principal later, even that wont legally be a default!

are they preparing the ground for defaulting even on the principal amount due to those debt holders!

looks like they are wording the law as they want in advance so that they can commit highway robbery so long as they have worded the law in advance to say even if the govt robs you in broad daylight even then in a court of law it cant be called a robbery. atleast thats how it looks to a layman like me.

in case it is different then can someone explain it to me please.

GDB2222

The yields on B&B PIBS have been at 30-40% for weeks/months. Presumably, the prices have collapsed still further since Tuesday?

I must say it's hardly surprising that these subordinated securities are virtually worthless. B&B is bust, after all, and these securities are at the bottom of the pecking order.

bubblesmoney

looks like the same can happen to LLyods RBS northernrock debt holders as well.

after the chrysler debt holders debacle anything can happen. any bets on whether the credit situation will worsen after such haircuts for creditors. looks like the only people not getting screwed are debtors.

looks like there is some action on the GILT front http://www.bloomberg.com/apps/news?pid=20601087&sid=asmfB8lXpLcA&refer=home

Schroder Investment Management Ltd., the second-largest holder of U.K. government bonds among companies that make regulatory filings, cut the gilts in its global fund to “near zero” as Britain’s finances deteriorate.

Oblivion

Probably a complete smoke screen, but would the timing of this announcement by B&B have anything to do with the announcement by Santander that it is rebranding Abbey, Alliance & Leicester and Bradford & Bingley so that they all become "Santander". Perhaps as part of the whole exercise, some other unwanted liabilities on the books are being put to rest?

Dave.

mewbie_2

Oblivion wrote: »

rebranding Abbey, Alliance & Leicester and Bradford & Bingley so that they all become "Santander".

This rebranding thing. Can Generali advise with his economic knowledge whether this is the financial equivalent of polishing a turd?