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The U.S. isn't the only place with an ailing financial system. The U.K. is also having some problems.
Take a look at U.K. mortgage lender, Bradford & Bingley Plc. The firm was aggressive on high-risk mortgages, and, as a result, there has been a plunge in profits.
To deal with the precarious situation, Bradford & Bingley has agreed to a $353 million investment from TPG, which is a mega private equity firm. That represents about a 23% equity stake.
Unfortunately, the ailing housing market in the U.K. appears to be far from over. As a result, we'll likely see other capital infusions of financial services firms.
This is certainly good news for TPG. After all, the firm has a long history in restructurings as well as financial services (for example, TPG helped structure a variety of deals for failed S&Ls during the late 1980s).
In fact, TPG is in the process of raising a $7 billion fund for financial services firm.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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Reader Comments (Page 1 of 1)
6-02-2008 @ 12:20PM
william lindblad said...
Old hat. Northern Rock went into self destruct late last year due to mortgages. Since they are the size of our Countryside, the BOE (and the taxpayer) had to come to the rescue. This is just another casualty to be added to the list. There has been at least one small bank in Ireland and another in Germany that did complete belly up. Both were bought up quick to avoid the bad publicity. Problem is not confined to the U.S. I understand that there are some problems of this nature in So. Spain, however this is un-confirmed. One thing is certain though, Spain has a major weather related water problem and the So. part tends to be a dry area to begin with. Valente filmed the spaghetti Westerns there. A house is not of much good when the well runs dry.