LONDON, Sept 29 (Reuters) - Britain is nationalising mortgage lender Bradford & Bingley BB.L and selling part of its business to Spanish bank Santander (SAN.MC).
Here are the highlights of a statement made by Britain's Finance Minister Alistair Darling about the deal.
* Bradford & Bingley's UK and Isle of Man retail deposit business along with its branch network has been transferred to Abbey National Plc. This transfer follows a competitive auction process for this part of the business, conducted by Morgan Stanley on behalf of HM Treasury.
* The remaining assets and liabilities of Bradford & Bingley - principally comprising its mortgage book, personal loan book, headquarters and relevant staff, and treasury assets and its wholesale liabilities - will be taken into public ownership through the transfer to the Treasury of the company's shares.
* For savers and borrowers of Bradford & Bingley it will be business as usual. Customers should continue to use their normal branches to access their accounts.
* Branches will be open this morning as usual, and internet, call centre, and all other transaction services will operate as normal. Although some of those employees are now employed under Abbey, they should all attend their workplace in the normal way.
* Savers' money remains absolutely safe and secure. Borrowers should continue to make their payments in the normal way.
* In the initial period of public ownership the senior management team of Bradford & Bingley will remain in place to manage the transition. The Chief Executive will continue to be Richard Pym. Over time the government will look at the management of the residual assets to ensure that this is being done in the most efficient manner.
* The Financial Services Compensation Scheme (FSCS) has been triggered following the failure of Bradford & Bingley to meet its regulatory requirements and its declaration of default by the FSA.
* The FSCS has paid out approximately 14 billion stg to enable retail deposits held in Bradford & Bingley and covered by the FSCS to be transferred to Abbey Santander. The Treasury has made a payment to Abbey Santander for retail deposit amounts not covered by the FSCS, amounting to approximately £4bn, to be transferred to Abbey Santander. In return, the FSCS and the Treasury have acquired rights in respects of the proceeds of the wind-down and realisation of the assets of the remaining business of Bradford & Bingley in public ownership.
* The FSCS has financed its payout through a short-term loan from the Bank of England, which it is intended will be replaced with a loan from the government after a short period of time.
* The repayment terms of the loan for the first three years provide for repayment of interest at a rate of one-year LIBOR plus 30 basis points, plus the repayment of any recoverables accruing to the FSCS from the wind-down of the business against the principal outstanding.
* The first payment, for interest from the period from now until end-March 2009, will take place at end-September 2009 and subsequent payments will be made annually thereafter. It is currently estimated that the first payment required in September 2009 by the FSCS under the loan will be approximately £450 million.
* After the first three years, it is intended that the loan will be refinanced by the Treasury, repayments of the principal to be made over a period of years in the light of prevailing market conditions.
* Darling confirmed in a statement that "the government stands behind the FSCS, so it can be relied on to be able to play its role in meeting future claims that arise".