Monday newspaper round-up: Lloyds Banking, Ryanair, British Airways
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 Ł25bn recapitalisation programme, the FT writes.Alongside plans to raise up to Ł13.5bn in a deeply discounted rights issue to be revealed on Tuesday, Lloyds is aiming to raise Ł7.5bn 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Lufthansa, the German flag carrier, has withdrawn bmi from sale and will concentrate on trying to turn around the loss-making airline itself.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.
| P/E: 8.5 | Div Yield: 4.6%
| P/E: 8.4 | Div Yield: 5.9% 
| P/E: 5.4 | Div Yield: 3.6% 
| P/E: 13.1 | Div Yield: 2.3%
| P/E: 6.2 | Div Yield: 12.8% 
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