I am holding a bond that matures in 2014 issued by RBS. the bond obviously lost its value. Now I am not a trader but a small investor and thinking to hold the bond until maturity. I would like to know what happens to my bond if RBS is fully or partly nationalised? thank you.

If RBS is fully nationalised then the expectation is that bond holders will lose out.

However, I don;t believe at all that the government will 100% nationalise RBS because doing so would be economic armageddon, as the UK would be saddled with at least 2 trillion in debt - which would mean the national debt increased 400% overnight. And nationalising RBS 100% would mean the markets would expect Lloyds to be next and dump the stock, leading to Lloyds being fully nationalised, adding another 2 trillion in debt - then all eyes would turn to Barclays. Meanwhile, the UK government would have its credit ratings slashed, the treasury would no longer be able to sell gilts, bonds, or other investment vehicles abroad, the pound would disintegrate, and we'd end up having to beg for emergency help from the IMF.

So in other words, I don't think RBS will be fully nationalised and that you should be able to avoid a worst case scenario.