Newspaper article The Evening Standard (London, England)

A Penny for Houlihan Lokey's Thoughts on the Rock Price

Newspaper article The Evening Standard (London, England)

A Penny for Houlihan Lokey's Thoughts on the Rock Price

Article excerpt

NO ONE could call Houlihan Lokey a household name, except in its home town of Los Angeles. Still, the Treasury must have heard of this West Coast investment bank, for it is said to have reached the shortlist of prospective valuers of Northern Rock. Someone has to come up with the terms on which the Rock will be nationalised, but it's a rotten job.

Ron Sandler, brought in as executive chairman, made it no better this week, posting a ?585 milion loss for this year's first six months, and saying that customers were having trouble in keeping up with their mortgages. Well, there's a thing. Perhaps all that new business that the Rock crammed on when house prices were peaking has now begun to backfire. Perhaps those loans of 100% of last year's values are now looking overstretched. Perhaps the better customers have taken their business elsewhere, and those who cannot move are left on the rocks, or the Rock.

It must have come as a nasty surprise to the Rock's lenders of last resort. To put some capital back on the books, ?3 billion of the public money lent to the Rock will be converted into shares. …

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