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Northern Rock Bonds That Lost Over 90% In Value To Repay In Full

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Investors in mortgage bonds from failed U.K. lender Northern Rock Plc will be paid back in full on debt that once traded at less than 10 percent of its sale price.

About 7 billion pounds ($10 billion) worth of residential mortgage-backed securities will be redeemed from Thursday, with the bulk of the notes to be paid back on Dec. 21, according to data compiled by Bloomberg. The securitizations, which are known as Granite, are being unwound after Cerberus Capital Management bought the underlying debt from the U.K. government.

Northern Rock funded about 50 billion pounds of U.K. mortgages through the Granite notes, becoming Britain’s fifth-largest home-loan lender before succumbing to the first bank run in the country in 140 years. The securities collapsed as the bank was nationalized and was no longer able to provide an equity cushion to protect bondholders.

Is this capitalism?


Edited by Eddie_George

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who's actually paying?

the word fraud, sprung into my mind when I read that.

it all seems too good to be to true.

everything is going back to normal.

The last normal was a week before the biggest debt bubble in history collapsed.

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Richard Branson's Virgin only paid £747m for Northern Rock.

Was that another joke at taxpayer's expense.... 747... jumbo jet... Virgin airlines....?

Northern Rock has been sold to Virgin Money for £747m in cash with the stricken bank due to be out of taxpayers’ hands by the end of the year.

The nation has made a loss on the £1.4bn it put into Northern Rock, which was finally taken into state ownership in February 2008 after the run on the bank in September 2007.


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Is this capitalism?

Capitalism is a system where, if you make a profit you keep it. If you make a loss the taxpayer bales you out.

Edited by Shrink Proof

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