Bradford & Bingley hit with fees for failed TPG deal

At the end of last week, Bradford & Bingley (B&B) announced it had been rescued by a group of UK investors, after US private equity firm Texas Pacific Group (TPG) pulled out of a deal, after credit rating agency, Moody’s, downgraded the lender’s debt.

TPG walked away from a deal to inject £179 million into B&B in exchange for a 23% stake.

Insight, Legal & General, Prudential’s M&G and Standard Life, which collectively own 14.25% of B&B, stepped in to fund £179 million as part of a £400 million fundraising deal that will be priced at 55p a share.

However, B&B which is one of the UK’s largest buy-to-let lenders, will still have to pay a substantial ’success fee’ to Goldman Sachs for advice on the failed US funding deal, according to a report in The Sunday Telegraph.

It is now known how much Goldman Sachs will gain but it is understood that it was to earn approximately £5 million should the TPG deal have been successful.

B&B has suffered of late due to the property market slowdown.

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