HBOS versus Freddie and Fannie

The U.S. House of Representatives has passed the housing bailout bill helping troubled mortgage borrowers, but also giving the U.S. Treasury Department a blank check to support Fannie Mae and Freddie Mac. The New York Times describes it this way: Representative Barney Frank, Democrat of Massachusetts and a primary author of the legislation, said troubled

B&B gets its money, HBOS and Barclays don’t

Now that Friday has come to an end in the UK, we can give a post-mortem to the UK capital raising campaigns from Bradford & Bingley, HBOS and Barclays. Bradford & Bingley shareholders have approved the bank’s £400m rights issue at an extraordinary general meeting in Sheffield. The backing means the lender can now go

Rumour: NAB wants to buy HBOS Australia

This is the latest M&A rumour making the rounds in financial circles. I caught this in Today’s Financial News. And that may be the moment when National Australia Bank (NAB:Australia) makes a formal offer for the Australian branch of HBOS. NAB, the country’s largest bank, has already begun discussing the feasibility of an offer with

Mortgage meldown in Britain

The UK is in the throes of the worst of the mortgage meltdown. Financial shares are tumbling. Home builders face collapse. Many top names in British housing and banking have been caught out and are getting a deserved swift kick: Northern Rock, HSBC, HBOS, RBS, Barratts, Bradford & Bingley, Taylor Wimpey — the list is

HBOS in trouble

In April, I wondered aloud where HBOS was in this crisis in a post called “Where’s HBOS?”. Now, we know they are not immune to the problems infecting global finance. The Guardian has reported on the difficulty HBOS is having raising money in the capital markets as its share price has fallen below the price

Barclays taps Sovereign Wealth Funds

The Sunday Telegraph is reporting yet another major Western bank is going cap in hand to sovereign wealth funds in order to stave off the inevitable crisis. This time its Barclays, Britain’s third largest bank. At a time when RBS is issuing a massive £12 billion of fresh capital by tapping its beleaguered shareholder base, Barclays must have decided it needed to go another route if it is to have success raising capital

Debt financing gone

Another side effect of the credit crunch is the lack of availability of cheap debt financing for businesses. Companies have two alternatives: they can hold off on needed financing until the credit markets are more inviting or they can raise money through alternative means like convertible bonds and rights issues (equity offerings). According to The

More on HBOS

The Lex column in Yesterday’s FT highlights what many market players are thinking about the company’s £4 billion ($8 billion) rights issue: the economic outlook in the UK is worse than feared. “The main potential explanation for the apparent excess capital is that the board’s outlook for the real economy is worse than stated. Retail

HBOS to raise new capital

As I predicted on Saturday, HBOS has got caught up in the global mortgage meltdown. Bloomberg reports: HBOS Plc, the U.K.’s biggest mortgage lender, will sell 4 billion pounds ($8 billion) of shares to bolster capital depleted by asset writedowns and a deteriorating housing market. As the UK housing market has only begun to turn

Where’s HBOS?

Looking through old e-mails, I read an article from the FT in 2006 that surfaced claiming that HBOS (Halifax Bank of Scotland)were poised and ready to go offer loans for 125% of value. That’s right, HBOS thought it a good idea to cover 95% of the house price and loan another 30% over appraised value unsecured as a personal loan.

Now that the UK has joined the housing bust, one must ask where are the massive writedowns that have to be sitting on HBOS’ books? Why aren’t they looking to do another rights issue like RBS? I fully expect some pretty horrific things coming from HBOS as the housing crisis heats up in Britain