February 24, 2012 / 9:22 AM / 7 years ago

Belgium, France hand $23 bln lifeline to Dexia - report

BRUSSELS, Feb 24 (Reuters) - Belgium and France have reached a deal to aid financial group Dexia SA by underwriting 17 billion euros ($23 billion) new debt in exchange for a faster cutting of its ties to state-owned Dexia Bank Belgium, Belgian media reported.

Dexia Bank Belgium, a unit of stricken Franco-Belgian financial group Dexia, was nationalised by Belgium for 4 billion euros and has an exposure of 56 billion to the group, it said in November.

The largest part of the exposure is part of financing for Dexia Credit Local, the unit that provides loans to local authorities in France, of which 22 billion euros are unsecured.

The debt line now handed to Dexia will be 60.5 percent guaranteed by Belgium, financial dailies L’Echo and De Tijd reported.

The Belgian finance ministry declined to comment and Dexia was not available to comment.

On Thursday, Dexia said it risked going out of business as it reported a 2011 net loss of 11.6 billion euros, hit by its break-up and exposure to Greek debt and other toxic assets. ($1 = 0.7511 euro) (Reporting By Robert-Jan Bartunek; editing by Rex Merrifield)

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