"We have not been told of anything that would give us concern that this transaction is at risk, but clearly in the magnitude of issues that HBOS must be dealing with we would be low on the priority," Finnigan said, adding the market would be informed of any developments as soon as they came to hand. Strategic CEO Kerry Finnigan told .nz in an email it was too early to say how the purchase of HBOS might affect the Strategic deal. BOS International has lent Strategic Finance NZ$150 million and is backing the management led buyout of the property financier from its Australian parent Allco HIT. They include Landco with NZ$365 mln, IMF NZ with NZ$355 mln, Cornerstone Group with NZ$155 mln, Infinity Group (Pegasus Town) with NZ$150 mln, Gulf Corporation with NZ$100 mln, Babcock & Brown Infrastucture with NZ$125 mln and Grasshopper Group with NZ$30m. The Sunday Star Times has previously reported that BOS International has also lent to property developers. Strategic and Dominion have suspended debenture repayments and interest payments, while Geneva is working through a delayed repayment plan. BOS International has lent to various finance companies in New Zealand, including Strategic Finance, Geneva Finance and Dominion Finance. The potential fallout from an NAB takeover of BOS International or any wider problems for HBOS could be significant. HBOS is based in Edinburgh and has a strong presence in the North of England. One suggestion was that HBOS could swap BankWest and BOS International's Australasian operations with National Australia Bank (NAB) in exchange for NAB's banking assets in the north of England (Clydesdale Bank and Yorkshire Bank). There had already been speculation that HBOS may be forced to sell some of its more far-flung subsidiaries, including its BankWest operation in Western Australia and BOS International. It is unlikely it would keep BOS International if the takeover is successful, given Lloyds' less aggressive appetite for risk and its focus on the UK market. Lloyds TSB said overnight it was concerned about some of the commercial property lending done by HBOS. Many of the investments behind those loans are in trouble. There is a strong New Zealand connection for HBOS (Halifax Bank of Scotland) because its corporate finance subsidiary, BOS International, has lent at least NZ$1.5 billion here to finance companies and various property developers. HBOS shares have fallen more than 90% in the last year and its market capitalisation is now at 9.5 billion pounds or less than 1.4% of its assets of 681.4 billion pounds. (Updated to include comments from Strategic CEO Kerry Finnigan) HBOS shares slumped as concerns mounted about its exposure to the collapsing British housing market and its ability to raise fresh capital easily on stock markets. Shares in Britain's largest mortgage bank, HBOS Plc, fell as much as 70% overnight before it emerged that it was in talks to be rescued and bought out by Lloyds TSB.
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