Lloyds Pays 12% Interest on Borrowings
The interest rates being offered by high street banks have gone up pretty sharply despite the basic rate sticking at 0.5%. But if you feel hard done by when it comes to borrowing, spare a thought for Lloyds. Bloomberg: The bank sold hybrid Tier 1 securities on Dec. 15 that cost 12 percent, or $240 million a year in interest, until 2024, according to data compiled by Bloomberg. That’s a higher interest rate than bicycle-rack maker TriMas Corp. paid to …
The interest rates being offered by high street banks have gone up pretty sharply despite the basic rate sticking at 0.5%. But if you feel hard done by when it comes to borrowing, spare a thought for Lloyds.
Bloomberg: The bank sold hybrid Tier 1 securities on Dec. 15 that cost 12 percent, or $240 million a year in interest, until 2024, according to data compiled by Bloomberg. That’s a higher interest rate than bicycle-rack maker TriMas Corp. paid to sell senior notes, which Moody’s Investors Service rates Caa1, seven steps below investment grade.
Having already raised about 23 billion pounds in debt and equity since the beginning of November, the bank has had to bite the bullet and pay at least $3.6 billion over 15 years to raise $2 billion in capital (figures compiled by Bloomberg hence the $). Tier 1 capital is used to cushion senior lenders and depositors against losses.
