However the bonds would need to be both wrapped and given a triple-A credit rating in order to render them in any way saleable. In short, they would need to be given a governmental guarantee.
Therein lies the issue as if the government alone guaranteed the new bonds, it would be classed as state aid and subsequently contravene European Commission legislation.
This means that Goldman Sachs would need to find a number of other financial institutions to back the bonds alongside the Treasury.
The most recent reports have indicated that a full nationalisation of Northern Rock is not the answer, however a partial one could still be on the cards. The BBC has suggested that senior staff have already been lined up in the case this route being taken.
Therefore this latest news puts a different spin on the current situation as ultimately, if this massive securitisation were to happen, a Virgin or Olivant rescue deal could still go ahead.
