Bond plan mooted to save troubled British bank

Prime Minister Gordon Brown on Saturday confirmed receipt of a key report on the future financing of British bank Northern Rock, after claims its loans will be converted into bonds and sold.
US investment bank Goldman Sachs has been looking into whether two private sector companies have enough funds to bail out the stricken mortgage lender, which was hit by last September's credit crunch on the global finance markets. Without citing sources, the BBC in London said the British government has backed a plan to turn the billions of pounds in Bank of England loans into bonds for sale to international investors, as recommended by Goldman Sachs.
Speaking in China, where he is on a two-day visit to boost trade links, including in the banking and financial services sector, Brown did not deny the report when it was put to him. Instead, he told reporters in the eastern financial hub of Shanghai: "I can confirm that discussions are taking place with private firms that have expressed an interest.
"I can also confirm that the Chancellor (of the Exchequer Alistair Darling) will make a statement to the (lower) House (of Commons) on Monday." It was unclear if by "private firms" Brown meant Richard Branson's Virgin Group and the private equity outfit Olivant, which have both been in talks with the troubled mortgage lender - or others.
Branson is accompanying Brown on his visit to China. He said Saturday he was confident his Virgin Money arm was the best deal and said detailed talks with Goldman Sachs would start within days.
"What's pleasing is that Goldman Sachs have a package which they believe works and I believe they have talked to our team and we are in initial discussions," he said after meeting business leaders in Shanghai. Asked whether Chinese money could back his deal, he added: "There's always the possibility of Chinese investment money. They have deep pockets at the moment.
"We have certainly got a small amount of Hong Kong money in our proposition but principally we will be British-backed and very much a British bank," he added, but did not elaborate on figures or specifics.
Both Brown and Branson said they had not talked to each other "in any detail" about Northern Rock during the trip. Goldman Sachs' recommends converting the emergency central bank loans of at least 26 billion pounds (34.5 billion euros, 51 billion dollars) into bonds for sale to international investors, according to the BBC.