As predicted, the Dexia "bad bank" rumor lasted all of, oh, 24 hours. After exhausting all talking points, French and Belgian politicians took out the abacus and were horrified to learn, as we suggested, that any implicit backstop would cost them dearly, and in France's case, at least one A of those critical AAAs that continue to keep Europe afloat. So implicit moves to explicit and as Belgian De Tijd reports, "the Belgian government will nationalize Dexia Bank Belgium." From the article: "the federal government came together this morning to rule on the future of Dexia Bank Belgium. There were several scenarios on the table. One was the nationalization of Dexia Bank Belgium (DBB) . This means that the Belgian state will buy DBB to quickly resell in the future. The disadvantage of this scenario is that the shareholders suffer most because they are left with the unhealthy parts of the group (the bad bank)." It also means that Belgium can kiss its sterling credit rating goodbye, and its CDS will continue going up until it meets that of Dexia, which will now have the same implied risk as that of the government about to consume it. Two questions arise next: will the website of Dexia be down indefinitely as locals decide that keeping their money in an insolvent bank may not be the best option, and, secondly, who will nationalize a governmentless Belgium next?
The balance of the article, Google Translated:
Yesterday worked Acro shareholder, Holding Communal, Ethias and the regions have an alternative plan from. That amounted to a separate listing for the bank and a nationalization or sale would be avoided. This would still "something" in it for shareholders. But that proposal did not make . The sale of DBB, according to sources within the federal government needed to shoring up bad bank.
The scenario where it was agreed in principle with the nationalization of the bank to sell short or medium term. That's according to a source , "the best scenario for the Belgian state and the taxpayer" .
It is possible that the regions - in time - even in the capital of Dexia Bank Belgium steps.
The federal government will soon submit its plans for the French. The steering group Dexia led by Hans D'Hondt is then combined with a French delegation. It can not be excluded that the government used emergency law to nationalize DBB. During the meeting also discussed the key for ensuring that Belgium and France to grant the financing needs of the group.
Dexia meanwhile reported a brief press release that it will start exclusive negotiations with a group of international investors that the Luxembourg state will participate, with a view to the sale of Dexia Banque Internationale à Luxembourg (Dexia BIL).
"The board of directors of the Dexia Group will be on the content of the possible bid to comment after the exclusivity period," the report said.
The dismantling of Dexia, which was decided last weekend at the highest level, is underway.
Time also heard that around the joint venture RBC Dexia Investor Services has discussions underway. Royal Bank of Canada (RBC) and Dexia each own 50 percent of world player of the management of securities funds. RBC has a preemptive right to shares of Dexia.
For Dexia Asset Management (Dexia AM) is "very interested," says one well-placed source. Names of interested parties are not known. According to our information, padding the private equity group CVC in recent months the possibility to take over the asset. But it did not go beyond informal contacts.
Furthermore, given the rescue of Dexia France shape. In France a new bank in the pipeline for lending to local authorities to secure. The Board of Directors of Banque Postale to BP, which is involved in the construction, gave the green light yesterday for the new setting.