RBS considers debt buyback scheme, newspaper reports

17 March 2010

The Royal Bank of Scotland (RBS) is considering repurchasing £10 billion worth of debt, a newspaper report has claimed.

Unnamed sources close to the matter stated that the move is part of a bid by the company to boost its reputation among investors and restructure its debt, the Financial Times reported.

The bank is expected to buy back the proportion of its £28 billion debt at premium prices.

Bruce van Saun, finance director at RBS, is thought to be currently drawing up the final details of the plan, which could be unveiled within a matter of weeks, sources told the newspaper.

RBS is considering following a plan recently undertaken by Rabobank in the Netherlands where the institution issued a €1.25 billion ($1.7 billion) ten-year contingent senior bond.

The bank is 70 per cent owned by the UK government and is currently paying the Treasury a four per cent fee for an £8 billion capital facility.

Earlier in the year RBS unveiled its plan to pay top investment bankers over £1 million in bonuses for 2009.

The firm recorded a loss of £3.6 billion for last year.

By Jim Ottewill

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