Texas Pacific fights for reputation as City rages

Texas Pacific Group was fighting to save its reputation in the City today, after its legendary, reclusive boss and founder David Bonderman intervened personally last night to pull the plug on the deal designed to save Bradford & Bingley.

The American private-equity group's move was widely condemned by the investment community as "deplorable", and critics said TPG may struggle to do business in London in the future. Said one analyst: "The City has short memories but not that short."

TPG had agreed to buy a 23% stake in B&B for £179 million as part of a £400 million fundraising deal by the mortgage lender to bolster its balance sheet.

However, it had the right to pull out of the deal if B&B was downgraded. It became clear to many, including the Financial Services Authority, that such a move was likely, and it eventually happened last night with Moody's cutting its debt ratings from A3 to Baa1.

Questions were being asked in the City today over why TPG did not see this coming sooner, and if it had, why it pushed the deal so hard. In recent days, it has given B&B assurances it would not abandon the deal.

However, in a serious fence-mending exercise, TPG was letting it be forcefully known today its decision to quit the deal was based on the contents of that Moody's report and just how potentially devestating it was.

TPG was also claiming that Bonderman only pulled the deal after it became apparent that other institutions and shareholders would be manning the lifeboat launched today to keep B&B afloat.

Nevertheless, the City conspiracy theorists and rumour mill has been at full tilt.

The suggestions are that if the Moody's downgrade was widely expected then TPG's decision must have also been informed by what it had found when trawling the B&B books and that it is those alleged nasties which were the motivation, with the Moody's report becoming the scapegoat.

TPG - which has more than $25 billion (£12.5 billion) under management - and Bonderman, are well-known in the City, though its role in the taking-private and then refloating of Debenhams still remains controversial following the department store chain's woeful performance on the market since.

Bonderman, one of the giants of the US private equity world, is also the chairman to Michael O'Leary's maverick airline Ryanair.