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Northern Rock

Treasury written question – answered on 29th November 2011.

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Photo of Chris Leslie Chris Leslie Shadow Minister (Treasury)

To ask the Chancellor of the Exchequer whether the new convertible debt in lieu of payments in the sale of Northern Rock will be received as a cash receipt during the remainder of this Parliament.

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.

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