Mon 02 Nov 2009
LONDON (SHARECAST) - Lloyds Banking will on Tuesday unveil twin sweeteners to persuade existing bondholders to exchange their bonds for riskier investments that could convert into equity – the most innovative, and closely guarded, element of the part-nationalised bank’s £25bn recapitalisation programme, the FT writes.
Alongside plans to raise up to £13.5bn in a deeply discounted rights issue to be revealed on Tuesday, Lloyds is aiming to raise £7.5bn of so-called contingent convertibles, or “Cocos”. These are bond financing that would count towards core tier one capital and convert into equity in a “stress scenario”.
Meanwhile, the Times adds that the future of high street banking will change for ever this week as the Chancellor bows to pressure from Brussels and agrees to break up banks that are supported by the taxpayer. Alistair Darling is expected to announce tomorrow that Lloyds Banking Group and RBS will be stripped down and various parts sold to new owners, creating as many as three new institutions on the high street.
Lufthansa, the German flag carrier, has withdrawn bmi from sale and will concentrate on trying to turn around the loss-making airline itself. After it became clear that an acceptable price could not be achieved, the company confirmed that it was no longer in talks with buyers, the Times reports.
Meanwhile, Ryanair chief executive Michael O’Leary has given the strongest indication yet that the airline may stop growing after 2012, when it is due to hit its target of flying 90m passengers a year. Speaking to the Financial Times ahead of Monday’s interim results, he said Ryanair did not need to secure a deal with Boeing for more aircraft – and could instead shift to a strategy of rationalising routes, building up cash and paying dividends to shareholders.
Reductions in food subsidies are among savings being sought by British Airways as part of a cost-cutting drive that could result in the airline being grounded by a cabin crew strike. The 20pc cutback is one of 16 changes in working terms and conditions for its 14,000-strong cabin crew being made by Britain's flag-carrier to save a further £140m as it prepares to post a record half-year, pre-tax loss estimated at around £250m, the Telegraph reports.
CIT group, America’s leading specialist lender to small business, filed for Chapter 11 late last night in the fifth biggest bankruptcy in US history. The collapse of the 101-year-old Utah-based lender, which trails behind only those of Lehman Brothers, Washington Mutual, Worldcom and General Motors in size, will leave US taxpayers with a $2.3bn bill, the Times reports.
Britain’s public finances are in such a dire state that the Government will need to implement an additional £350bn of spending cuts and tax increases over the next five years, at great cost to the economy, a leading economist will warn today. Roger Bootle, economic adviser to Deloitte, will say that Britain’s public finances are in the “worst shape for at least half a century” and warn that the country faces “the tightest squeeze on public spending for a generation”, the Times reports.
The Conservative Party's plans to slash public spending and shrink the deficit as soon as reaching office could spell "disaster" for the UK economy, a prominent economic consultancy warns. In an analysis that could undermine Tory plans to impose a new period of austerity, Fathom Consulting uses its survey of the UK economy to issue a stern warning about the risks of tightening policy too soon, reports the Telegraph.
Wm Morrison, Britain’s fourth-biggest supermarket group, has signalled to suppliers that it is looking for more support for promotions as competition intensifies in the grocery sector. Suppliers said that they were braced for Morrisons to begin negotiations over the coming weeks, reflecting the supermarket’s desire to reach agreements by early next year, the FT reports.
Banking giant Barclays is spearheading a new British invasion of Russia’s high street, according to one of its most senior bankers, as relations between the two countries bounce back from last year’s low point. Barclays, as well as rival HSBC, have become increasingly visible across central Moscow with new branches and high-profile advertising as part of a move to aggressively expand in Russia’s major cities, the Independent reports.
Mon 02 Nov 2009
Alongside plans to raise up to £13.5bn in a deeply discounted rights issue to be revealed on Tuesday, Lloyds is aiming to raise £7.5bn of so-called contingent convertibles, or “Cocos”. These are bond financing that would count towards core tier one capital and convert into equity in a “stress scenario”.
Meanwhile, the Times adds that the future of high street banking will change for ever this week as the Chancellor bows to pressure from Brussels and agrees to break up banks that are supported by the taxpayer. Alistair Darling is expected to announce tomorrow that Lloyds Banking Group and RBS will be stripped down and various parts sold to new owners, creating as many as three new institutions on the high street.
Lufthansa, the German flag carrier, has withdrawn bmi from sale and will concentrate on trying to turn around the loss-making airline itself. After it became clear that an acceptable price could not be achieved, the company confirmed that it was no longer in talks with buyers, the Times reports.
Meanwhile, Ryanair chief executive Michael O’Leary has given the strongest indication yet that the airline may stop growing after 2012, when it is due to hit its target of flying 90m passengers a year. Speaking to the Financial Times ahead of Monday’s interim results, he said Ryanair did not need to secure a deal with Boeing for more aircraft – and could instead shift to a strategy of rationalising routes, building up cash and paying dividends to shareholders.
Reductions in food subsidies are among savings being sought by British Airways as part of a cost-cutting drive that could result in the airline being grounded by a cabin crew strike. The 20pc cutback is one of 16 changes in working terms and conditions for its 14,000-strong cabin crew being made by Britain's flag-carrier to save a further £140m as it prepares to post a record half-year, pre-tax loss estimated at around £250m, the Telegraph reports.
CIT group, America’s leading specialist lender to small business, filed for Chapter 11 late last night in the fifth biggest bankruptcy in US history. The collapse of the 101-year-old Utah-based lender, which trails behind only those of Lehman Brothers, Washington Mutual, Worldcom and General Motors in size, will leave US taxpayers with a $2.3bn bill, the Times reports.
Britain’s public finances are in such a dire state that the Government will need to implement an additional £350bn of spending cuts and tax increases over the next five years, at great cost to the economy, a leading economist will warn today. Roger Bootle, economic adviser to Deloitte, will say that Britain’s public finances are in the “worst shape for at least half a century” and warn that the country faces “the tightest squeeze on public spending for a generation”, the Times reports.
The Conservative Party's plans to slash public spending and shrink the deficit as soon as reaching office could spell "disaster" for the UK economy, a prominent economic consultancy warns. In an analysis that could undermine Tory plans to impose a new period of austerity, Fathom Consulting uses its survey of the UK economy to issue a stern warning about the risks of tightening policy too soon, reports the Telegraph.
Wm Morrison, Britain’s fourth-biggest supermarket group, has signalled to suppliers that it is looking for more support for promotions as competition intensifies in the grocery sector. Suppliers said that they were braced for Morrisons to begin negotiations over the coming weeks, reflecting the supermarket’s desire to reach agreements by early next year, the FT reports.
Banking giant Barclays is spearheading a new British invasion of Russia’s high street, according to one of its most senior bankers, as relations between the two countries bounce back from last year’s low point. Barclays, as well as rival HSBC, have become increasingly visible across central Moscow with new branches and high-profile advertising as part of a move to aggressively expand in Russia’s major cities, the Independent reports.
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