Babcock & Brown's emergency funding lifeline has breathed life into the struggling investment bank's shares, as the market digests the new loan.

The bank's stock is now up 120%, after the shares began trading again, following its suspension for more than a week.

Babcock will suspend the dividend payments on its ordinary shares, as part of a deal with the banks to channel funding into interest repayments.

Babcock & Brown secured a short-term $150 million loan from the Australian participants in the lending syndicate - it was agreed to late last night by two German banks.

The Australian