UK chancellor Alistair Darling is set to drop the £480m annual interest bill charged to Lloyds Banking Group on a taxpayer loan in exchange for a promise by the bank to provide billions of pounds in extra mortgage funding and loans. The chancellor is prepared to convert £4bn of government preference shares – which carry a 12% coupon – into other forms of non-voting equity, to prevent the government’s 43% stake in the bank rising above 50%. The possible move is part of Darling’s wider negotiation to extract quantifiable lending commitments from Lloyds and from RBS.

This entry was posted by Gwen Robinson on Tuesday, February 24th, 2009 at 5:23 and is filed under Capital markets. Tagged with Alistair Darling, Lloyds Banking Group, rbs. Edit this entry.