Monday, Sep 24, 2007
The proposed deal would see the funds divide up Northern Rock's mortgage book, worth more than £100bn. But shareholders would be left penniless.
telegraph.co.uk: leave shareholders with virtually nothing.Hedge funds plot Northern Rock raid
The hedge funds believe they could acquire Northern Rock's mortgages at below face value and make huge profits by holding them until they mature. The funds have yet to approach the Northern Rock board, which has spent the week scrabbling to find a new source of financing.
Posted by chris @ 05:19 AM (329 views) Add Comment
1 Comment
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1. alan said...
Chris Wood (on NR) ..."£80bn in mortgages outstanding supported by just £2bn of shareholders' equity and £78bn of mostly short-term debt", Chris says, "would not disgrace a Thai finance company prior to the Asian crisis".
I can't beat that sort of comment, reported by Reuters.
Chris Wood also suggested (in 2005) that the UK should steer well clear of US mortgage debt.