(Adds background on October agreement in fourth paragraph.)
Nov. 24 (Bloomberg) -- Dexia SA, the bank being broken up after running out of short-term funding, should have borrowing guarantees agreed by the Belgian and French governments within days, a French official said.
The guarantees will reflect the terms on supporting Dexia that were reached in October, the official, who spoke on condition of anonymity, told reporters today in Paris. Ulrike Pommee, a spokeswoman at Dexia in Brussels, declined to comment on the funding when reached by telephone.
Dexia rose as much as 34 percent to 36 cents and traded up 4 cents, or 16 percent, at 31 cents by 3:50 p.m. in Brussels. The stock has lost 87 percent this year, giving the firm a market value of 604 million euros ($805 million).
Dexia, as part of its second government rescue in three years, obtained a 90 billion-euro guarantee for 10 years from Belgium, France and Luxembourg last month to cover its funding needs.
The company, based in Brussels and Paris, will sell its Luxembourg unit within days and talks about the government- backed funding of the remaining assets shouldn’t face “insurmountable difficulties,” Luxembourg Finance Minister Luc Frieden said yesterday.
Dexia, once the world’s largest municipal lender, said Nov. 9 its shareholder equity shrank 84 percent after the nationalization of its Belgian bank unit and declines in the value of government-bond holdings.
--Editors: Stephen Taylor, Jon Menon
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