Money Story

05 September 2008 06:08 BST

Bradford & Bingley seeks £400m rights issue

Friday, 04 Jul 2008 10:56

Bradford & Bingley announces new rights issue

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Troubled lender Bradford & Bingley has announced it will return to its original rights issue plans, following the withdrawal of potential investor Texas Pacific Group (TPG).

Following the decision by Moody's – the credit rating agency responsible for B&B – to downgrade the organisation's debt rating, TPG confirmed it was to walk away from the deal.

TGP had been planning to take a 23 per cent stake in Bradford & Bingley, following an approach on June 2nd.

In response B&B – the eighth biggest UK bank - will now return to it initial plan to raise some £400 million through a rights issue.

It is thought some of the company's largest investors – including M&G Investment Managers, Legal & General Investment Management, Insight Investment and Standard Life Investments – will take control of the bulk of the stock.

The rights issue has an unchanged subscription price of 55 pence per share, and will be underwritten by Citi and UBS.

"While we are disappointed that TPG intends to terminate its Subscription Agreement, I am pleased that Citi and UBS and our major shareholders continue to support our proposed capital issuance," said executive chairman Rod Kent.

"Bradford & Bingley continues to be well-funded and the capital raising will reinforce our position as one of the better capitalised banks and one of the leading mortgage and savings banks in the UK."

B&B – which is the largest buy-to-let lender in the UK - plans to announce further details in due course, with its annual general meeting now scheduled for the week of July 14th.

In response to the announcement the B&B share price fell 9.84 per cent to 55p a 8:16 BST. End of story

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Bradford & Bingley seeks £400m rights issue

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Also In The News

Taylor Wimpey to cut 900 jobs

Construction hits lowest level in a decade

London property prices see second monthly drop