Northern Rock halts bond payments

Northern Rock has announced it will stop paying interest on some of its bonds until further notice.

The deferral in payments will affect investors in eight different subordinated notes. Northern Rock, nationalised last year after the credit crisis brought it to the brink of collapse, says the move will help provide a capital cushion until it completes a proposed restructuring, which would see it split into two parts. The Government plans to separate the bank's lending business from its past mortgage loans, which will also be responsible for paying back the outstanding Government loans to the bank. As part of the reorganisation, subject to approval from the European Commission, th...