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The bank loaned BlackRock more than $11 billion to take on those debts, and remains on the hook if losses exceed $3.75 billion, but it was able to move some of that debt off its balance sheet.
According to The Telegraph, the buyout shop, which got the banks to lend it the money to buy Boots in the first place at extremely attractive rates, is now preparing to take on those debts itself at a discount.
"With medical bills, people are very compelled to make good on those debts," she said.
Many pledged virtually all their assets as collateral on those debts, leaving little left to back DIP loans.
The numbers exclude debt held within the government, by the Social Security trust fund, and the cost of interest on those debts.
Then the government would not need to tax the rest of us to pay interest on those debts to the rich.
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So far, the Fed has received about $140 billion through repayments of the principal on its holdings of those debts.
The only advantage is that at least they will have spare cash, either to clear those debts on the domestic front or make some seriously sound investments at home".
More important, perhaps, by reducing the threat of panicked runs on bank debt (since those debts would have been guaranteed), such a guarantee would also have made it easier for regulators and banks to deal in a transparent fashion with the toxic-asset problem.
For example, the department could determine how many former Corinthian students eligible for a so-called "closed school discharge" have remained eligible by not transferring their credits to other schools, and forgive those debts based on that information.
More worryingly, a tower of credit default swaps — a form of debt insurance typically sold by investment banks — has been built on the debts of those countries, and the cost of paying up in a default would be huge.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com