As mentioned above, the price to be paid for the support received from the UK government by the Royal Bank of Scotland and Lloyds Banking Group was announced by the EU Commission and UK Treasury last week. RBS will have to sell its insurance business, part of its branch network in the UK and dramatically scale back its investment banking operations. The EU also stipulated that coupons not be paid on hybrid securities, and call options are not to be exercised, although just which securities are going to be affected by this stipulation is subject to clarification.In addition, the UK government will now insure only ₤282 billion of assets under its Asset Protection Scheme, rather than the ₤325 billion originally proposed; and the excess that RBS will have to absorb has increased to ₤60 billion from ₤42 billion. This will be mitigated somewhat by the government increasing its next equity injection to ₤26 billion from ₤20 billion. This will lift the government's economic stake in RBS to 84 per cent from the current 70 per cent. The three credit rating agencies made similar but also some divergent responses to the announcements. S&P affirmed its counterparty credit ratings on the group with a stable outlook, lowered the ratings on hybrid securities with fully discretionary coupons to 'CC', other Tier 1 and upper Tier 2 hybrid security ratings were placed on CreditWatch with developing implications and ratings on lower Tier 2 hybrid securities with deferrable coupons were placed on CreditWatch with negative implications. Moody's affirmed its 'A1/Aa3' senior unsecured debt and deposit ratings assigned to the group and the 'C-' stand alone bank financial strength rating. It did not make any changes to ratings assigned to junior subordinated debt or preference shares as these ratings had already been lowered in anticipation of the EU directive. However, any outstanding reviews on such securities will now be finalised.Fitch Ratings affirmed its AA-/Stable/F1+ issuer default ratings assigned to the group but has placed the 'E' individual rating on Rating Watch Positive. Fitch believes RBS will now be in a better position to pursue its restructuring and de-leveraging strategy.Fitch downgraded and removed from Rating Watch Negative all ratings on hybrid securities where coupon payments appear discretionary, with other upper Tier 2 and Tier 1 hybrid security ratings remaining on Rating Watch Evolving. Fitch has maintained a Rating Watch Negative on certain lower Tier 2 hybrid securities where coupon deferral is possible but the risk is considered to be limited.According to our records, RBS has A$1.9 billion of subordinated debt on issue in the domestic market: A$900 million matures in February 2012 and A$1.0 billion in October 2014. It is not yet clear how this debt will be affected but secondary market pricing suggests a poor outcome is being factored in.   The EU Commission also instructed Lloyds to divest part of its UK branch network and said coupons are not to be paid on hybrid securities and call options are not to be exercised. Again, just which