JC Flowers, the US private equity firm, is in discussions with a team of major banks about providing £1.5bn in financing for a bid for insurer Friends Provident PLC, the Sunday Times reported.
It is hoping to raise £1.2bn from four banks, including HBOS, HSBC, Morgan Stanley and the Royal Bank of Scotland.
The remaining £300m will come from smaller institutions, the newspaper said, without citing sources.
UBS, THE UNDERFIRE SWISS BANK, has become the first European bank to be sued by an investor over the sale of financial products that collapsed as a result of the meltdown in sub-prime mortgages in the United States, reports The Times.
HSH Nordbank, one of Germany’s biggest banks, is suing the largest Swiss bank over $500m (£254m) of collateralised debt obligations (CDOs) in what lawyers said was likely to be the first of many such cases in Europe.
HSH is looking to sue for losses of more than $200 million, sources said. The legal action is likely to bring further embarrassment to Marcel Ospel, the UBS chairman, who is under intense pressure after revealing $18.4bn in writedowns in the wake of the global financial crisis.
HSH accused UBS of putting risky American mortgages instead of low-risk assets into a CDO that it sold to the German bank in 2002. The bank has engaged Quinn Emanuel, a US law firm, to sue UBS for breaching its contractual obligations and fiduciary responsibilities.
THE FEDERAL RESERVE WILL today continue its unprecedented efforts to prop up the credit markets, in what is set to be one of its most closely watched auctions of new debt, reports The Independent.
The Fed began offering cheap loans to the financial markets in December as part of a co-ordinated series of measures by international central banks aimed at easing the credit crisis, and it has now loaned more than $130bn to Wall Street firms at fortnightly auctions, far outstripping the $40bn it initially said it was willing to offer.
It is auctioning a further $30bn tranche of debt this morning at a minimum interest rate of 2.81%, making it cheaper than the 3% rate that banks typically lend to each other. The money will be due for repayment in 28 days.
The Fed is stepping in as lender of last resort because Wall Street institutions, fearful of losses and hoarding money to prop up their own battered balance sheets, have become notably more reluctant to lend to each other.
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