1) Although the gross debt is $853mil, the bank syndicate only...

1) Although the gross debt is $853mil, the bank syndicate only bankrolled $355mil for Quindell purchase. If SGH is negotiating with the syndicate as a whole, the Debt swap amount won't higher than that.
2) If it's Debt to Equity swap, it won't be straight up SGH Shares. That will tie the banks too closely to the company's future performance, it doesn't fit the banks' risk profile. (this also means if the banks actually do that for anything above $100mil, banks are very optimistic about SGH.)
3) Debt to Share Option is much up the banks' alley. SGH's debts are stagnating on various banks' books atm, changing them to options at a heavily discounted rate, banks can carved up the options and sell them on the secondary market, or more likely, bundled up with other derivatives to sell as a packet. It's liquid, and once sold, de-risk themselves further. Of cause, this option is pretty bad for us holders, and I really, REALLY hope they won't do this, but it's in their hands now, nothing we can do about it.