That multi-billion Chinese investment in Thames Water was no such thing.

I think The Telegraph had the most accurate summary of what has actually happened. The BBC's version is also reasonably good. To cut a long story:

1. Thames Water was privatised donkeys years ago, and all those little UK popular capitalists did the decent thing and sold all their shares to German utility concern RWE in 2001.

2. Various pension, investment and sovereign wealth funds set up a company called Kemble Water which bought Thames Water for £8 billion [gross] from RWE in 2006.

3. Stakes in Kemble Water change hands occasionally, for example "In December [2011], the Abu Dhabi Investment Authority, another sovereign wealth fund, bought 9.9pc of Kemble for an undisclosed price. Macquarie European Infrastructure Fund was the majority seller in that deal."

4. The Chinese sovereign wealth fund (China Investment Corporation, CIC) has now bought 8.68% of Kemble Water "for an undisclosed sum which analysts believe is at least £500m [from] Santander Private Equity, part of Spanish banking group Santander's asset management arm, and Finpro, a Portuguese investment vehicle..."

5. So big deal really, legal ownership* of Thames Water has been in foreign hands since 2001 (and chunks of it before then), it is merely that Juan Foreigner has now sold a bit of it to Johnny Foleigner. Not a single penny has been invested in the UK as a result of this, and it's not even as if we have reduced our net indebtedness to the Chinese. George Osborne is making an idiot of himself by prancing round and pretending otherwise.

* Of course, in practice, the UK government, OFWAT and so on still have reasonable day-to-day control over Thames Water. That's the nice thing about selling off stuff to foreigners, instead of them having you over a barrel, you have them over a barrel.

Debt For Equity Swap Of The Week: Santander

From FT Alphaville:

Since Unicredit is doing this rights issue to meet the European Banking Authority’s target for banks to meet a nine per cent core capital ratio by June – it’s also worth mentioning in passing Santander’s announcement on Monday that it’s met the EBA goal. Modestly hooting that it’s "one of the world’s most solid and well-capitalised banks", Santander says it’s found €15bn of additional capital via the following:

- EUR 6,829 million through Valores Santander.

- EUR 1,943 million through the exchange of preferred shares for ordinary new shares.

- EUR 1,660 million through the application of the Santander Dividendo Elección program (scrip dividend) at the time of the final dividend corresponding to fiscal year 2011.

- EUR 4,890 million through organic capital generation and the transfer of certain stakes, mainly in Chile and Brazil.

Interesting to note that the "Valores Santander" portion is made up of converting retail bonds that were originally issued in 2007 into shares during October 2012. As the WSJ has reported, it’s been anything but “valores” for Santander retail investors who bought these securities.

Yes, it's tough, but better them than the taxpayer, eh?

"Santander agrees A&L takeover"

Woo hoo!

When I first covered this, A&L's market cap was £2 bn, so Santander seem to have timed this right (they've offered £1.2 bn).

So, Alliance & Leicester aren't going to spoil my winning streak - unless this goes sour like the mooted Texas Pacific Group/Bradford & Bingley deal, of couse.

Update, as JonB points out "... if your combined savings in Abbey and A&L exceed £35k, you need to move some elsewhere as soon as possible."