Belgium Paying EU4 Billion for Dexia Belgian Unit, Reynders Says

Belgium is paying 4 billion euros ($5.4 billion) to buy Dexia SA (DEXB)’s Belgian retail unit and will cover about 60 percent of a 90 billion-euro guarantee for the bank, Belgian Finance Minister Didier Reynders said.

Belgium, France and Luxembourg agreed to grant a financing guarantee to Dexia of up to 90 billion euros for 10 years on financings, bonds and securities, the maturity of which can be up to 10 years, the Belgian and French governments said today in a parallel statements. The three governments agreed to spread the guarantee according to the same scale as in 2008 -- 60.5 percent for Belgium, 36.5 percent for France and 3 percent for Luxemburg, they said.

The guarantee is “evidence of the substantial efforts made by the Belgian, French and Luxemburg governments for the benefit of the financial stability in the euro area,” according to the statement. The guarantee will help “give new margins of maneuver to the Dexia group in terms of liquidity and thus reduce its exposure,” it said.

“The three governments confirm they will take all the necessary measures to ensure the depositors’ and creditors’ safety,” according to the statement. “They will pay a particular attention to the rights and interests of the employees of the group and its subsidiaries so that the safeguard thereof is guaranteed.”

The new restructuring plan for Dexia, which also includes measures for its French municipal loan unit and its Luxembourg operation, “will be submitted to the European Commission and the competent authorities so that it can be implemented as quickly as possible,” it said.

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