Stock Exchange Announcement

18/12/2007H M Treasury - Statement re Northern Rock

RNS Number:1363K
H M Treasury
18 December 2007


Northern Rock plc: Extension of wholesale guarantee arrangements

HM Treasury today confirms that the guarantee arrangements for Northern Rock plc
described in HM Treasury's announcements dated 20 and 21 September 2007 and 9
October 2007 are being extended, at the request of Northern Rock plc, to the
following unsubordinated wholesale obligations, whether now existing or arising
in the future:


1.     all uncollateralised and unsubordinated wholesale deposits and other
borrowings which are outside the guarantee arrangements previously announced by
HM Treasury;


2.     all payment obligations of Northern Rock plc under any uncollateralised
derivative transactions;


3.     in respect of all collateralised derivatives, and all wholesale
borrowings which are collateralised (including, without limitation, covered
bonds of Northern Rock plc), the payment obligations of Northern Rock plc to the
extent that those obligations exceed the available proceeds of the realised
collateral for the relevant derivative or borrowing; and


4.     all obligations of Northern Rock plc to make payments on the repurchase
of mortgages under the documentation for the 'Granite' securitisation programme.


The previous announcements have created guarantee arrangements for all unsecured
retail products of Northern Rock plc and many of its wholesale deposits and
borrowings.  This announcement extends these arrangements to a wider range of
wholesale products.  The extension is in line with the previously announced
objectives of the Tripartite Authorities of financial stability and the
protection of the taxpayer and consumer and for the purposes of Northern Rock
plc's credit ratings in respect of the wholesale obligations described above.


No change is being made to the guarantee arrangements in respect of retail
deposits of Northern Rock plc, which remain fully protected under the
announcements previously made by HM Treasury.  Northern Rock plc will pay an
appropriate fee for the extension of the guarantee arrangements.


As previously announced, the arrangements to protect retail and wholesale
depositors of Northern Rock plc will remain in place during the current
instability in the financial markets.  Reasonable notice, which will not be less
than 3 months, will be given by HM Treasury of any termination of these
arrangements.


                      This information is provided by RNS
            The company news service from the London Stock Exchange

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