Alliance and Leicester has taken a £4 billion loan from Credit Suisse in addition to several other loans from various banks . The two-year long loan goes some way to allaying funding fears regarding the bank, after it was announced that the mortgage lender wouldn’t fulfil the £589 million profit originally forecast.
With news of the loan emerging on the same day as speculation of a bid from Banco Santander for the bank, Alliance and Leicester’s share price enjoyed a rise of 8.4 per cent. Further good news arrised for the bank in the form of its write down announcement. Although the lender has suffered a £55 million pretax loss on its exposure to credit markets and £101 million write downs on other Treasury investments, those write downs were far less than had been feared.
Such a loan is a rarity in the current climate, with few lenders offering such a generous maturity period, leaving analysts to speculate about the interest rate attached to the loan. Although it has been confirmed that the rate is above Libor, the rate at which London’s banks lend to each other, it is unknown quite how much higher it is.
Credit Suisse Loan Boosts Bank
Credit Suisse Loan Boosts Bank
Wed, 09 Jan 2008
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