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AC rules out 'colossal failure' of government stake for aid; bailout debate thread

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AC rules out 'colossal failure' of government stake for aid; bailout debate thread

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Old Nov 19, 2021, 6:45 pm
  #196  
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Originally Posted by yulred
Guess the only question is: would it have been cheaper to refund that $1.2B from their own pocket? Or did it make sense to use government funds and pay interest on it.
I would assume that they were banking on not having to pay out refunds at all unless pushed to, and only did so when it wasnt possible to hold out any longer, and other bailout money was dependant on it.
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Old Nov 19, 2021, 7:16 pm
  #197  
 
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Originally Posted by yulred
Guess the only question is: would it have been cheaper to refund that $1.2B from their own pocket? Or did it make sense to use government funds and pay interest on it.
The taxpayer backed interest rate was cheaper than the institutional rate.
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Old Nov 20, 2021, 10:06 am
  #198  
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Originally Posted by yulred
Guess the only question is: would it have been cheaper to refund that $1.2B from their own pocket? Or did it make sense to use government funds and pay interest on it.
Maybe (although as tracon pointed out, if the company had needed to borrow at that point of time they likely would have paid significantly higher rates) based on giving up equity, but at the time the length of time for recovery was uncertain and this served as a valuable backstop.

WS made it work going the other route.
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