First Fortis, now Dexia & 6 Irish Bank also get State suppport Tuesday, September 30, 2008
The contagion continues to spread. After Fortis received an equity injection from three Governments yesterday, Dexia has followed suit except this time by France, Belgium and Luxembourg.
Ireland has also underwritten its' six largest financial institutions by guaranteeing deposits, covered bonds, senior debt and dated subordinated debt [nationalisation in all but name]. The institutions will be charged for this guarantee.
Hypo Real Estate, one of Europe’s biggest commercial property and public sector lenders, was handed a €35bn liquidity lifeline by other German private sector banks, the Bundesbank and the ECB. The lender is also selling €15bn of assets to cover its liquidity shortfall.
What is notable is that these institutions features at or near the top of a table produced by Cazenove analysts courtesy of FT Alphaville.
Ranking by ratio of debt to equity
Ranking by proportion of debt coming due in 2008/2009
It is notable that Dexia have relatively less short-term debt than others.