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The sums are simply guarantees by the government to repay lenders if the builder cannot do so.
AssetCo needs the cash to repay lenders like Lloyds Banking Group by a deadline of this week and warned that without the bail-out it might not survive.
The likelihood of entering such a vicious circle could also rise next year, when Spain is due to repay lenders 192 billion euros, or about a fifth of the total debt.
Such a filing, in which creditors and management agree to a restructuring plan in advance, would identify what assets Enron still has that could be used to partly repay lenders and other creditors.
It protects a company from its creditors and allows its managers to stay in control until they can come up with a plan to reorganise the business (in contrast to Chapter 7, which deals with liquidating companies outright and selling their assets to repay lenders).
Whereas existing P2P lenders will dip into reserve funds to repay lenders if borrowers default, Lending Works insures against default and risk, at no extra cost to customers.
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The health insurance profits that don't go toward repaying lenders go into a reserve to strengthen the company's finances, though some future profits will eventually be recycled into running the daily operations of the Freelancers Union and future projects, like a planned health clinic in Manhattan.
There is nothing wrong with repaying lenders, either.
Except that Lehman's sole objective is to sell everything it owns so it can repay its lenders and disappear.
Technically, the next time government debt comes up for renewal the Treasury will be unable to repay its lenders.
In particular, concerns have grown that Spain's continuing budget cuts could deepen the country's recession and make it harder for the government to repay its lenders.
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CEO of Professional Science Editing for Scientists @ prosciediting.com