U.K. to insure $365 billion in Lloyds assets - British government stake could rise to 77%, ....

Marketwatch ^ | March 7, 2009 1:44 p.m. EST | Andria Cheng, MarketWatch

[Ernest_at_the_Beach]

British government stake could rise to 77%, reports say

NEW YORK (MarketWatch) - Lloyds Banking Group PLC and the U.K. government have reached an agreement in which the government's stake in the financial giant could increase to as much as 77% in exchange for its insuring up to 260 billion pounds ($365 billion) of the bank's risky assets, according to reports Saturday.

The deal would involve Lloyds giving the government 15.6 billion pounds in non-voting B shares in return for the British Treasury's insurance against further losses on its assets, Reuters reported.

The move would bump the government's stake in Lloyds to 65% from 43% if investors don't take up an offer to buy 4 billion pounds of shares now held by the government, the report said. The government's interest could go up to 77% if the B shares are converted to ordinary shares, although its voting stake would be capped at 75%.

As part of the agreement, the bank will take a "first loss" of up to 25 billion pounds, with the U.K. government shouldering 90% of any subsequent loss, according to Reuters.

"Participating in the government's asset protection scheme substantially reduces the risk profile of the group's balance sheet," Lloyds Chief Executive Eric Daniels said in a statement issued Saturday morning, as quoted in a Wall Street Journal report.

[Ernest_at_the_Beach]

related thread:

'Run on UK' sees foreign investors pull $1 trillion out of the City

[exist]

Thank goodness our government hasn't gone that far. Oh wait...

[Ernest_at_the_Beach]

Damn...

Another related thread:

World's biggest banks to meet in London: report

[Ernest_at_the_Beach]

And there is this thread for some basics...for those that love to read:

Posted this earlier last night:

BIS Quarterly Review, December 2008 ( Global Financial Information )

[meadsjn]

So in a nutshell:

The Free Traitors made gazillions by redistributing the productive wealth of Other People's Money to third-world communist cesspools -- gambles that were designed to fail in the third world, and impoverish the industrialized world.

Knowing their gambles would eventually fail, the Free Traitors insured their gambles through various large insurance companies that were Too Big to Fail, in addition to devising outside-the-market gambles for and against the prospect of failures, pretending that all the gambling slips were legitimate commercial paper.

Now that the Free Traitor insurance scam has hit the fan, they want the taxpayers of the US and UK (their original victims) to pay for the losses (imagined or real) that they, the Free Traitors, created.

Hang'em all.

[Mister Muggles]

Will this “pound the Pound” at the Forex open in a couple hours?

[DB]

Any bets on the U.K. being the next Iceland?

[Ernest_at_the_Beach]

I think there were some comments along that line on the thread linked at post #2.