Alliance & Leicester is expected to make significant write-downs on the value of its holdings of so-called 'toxic loans' in its trading update. The Observer
A&L's share price has plunged more than 40 % in the past three months on fears about the value of its assets and the security of its funding structure.
Analysts estimate that £10bn of its funding is in instruments that fall due within the next three months, while it admitted in September that it had £175m invested in collateralised debt obligations backed by US sub-prim mortgages and a further £390m in structured investment vehicles. The value of these assets has been plunging as the US housing market has soured.
A&L has yet to fix the date of its trading statement, sparking speculation that it is still trying to value these instruments, but it is expected within the next two to three weeks. Bradford & Bingley and Barclays will issue their trading updates this week.