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Northern Rock

Treasury written question – answered on 29th November 2011.

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Photo of William Bain William Bain Shadow Minister (Scotland)

To ask the Chancellor of the Exchequer what the (a) loan period and (b) extent of return to the public purse is of the capital instrument lending to Virgin Money to facilitate the takeover of Northern Rock.

Photo of Mark Hoban Mark Hoban The Financial Secretary to the Treasury

Virgin Money will issue to HM Treasury, on completion of the sale, Tier 1 Capital Notes with a par value of £150 million and an annual coupon of 10.5%.

Virgin Money has indicated that it intends the notes would be exchanged, or purchased by the acquirer, upon an Initial Public Offering or sale, without reducing the amount and quality of the firm's capital resources, which would allow HM Treasury to exit its investment.

Does this answer the above question?

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