Bradford & Bingley in £300m rights issue

| May 14, 2008 | 0 Comments
Bradford & Bingley in £300m rights issue

Buy-to-let specialist, Bradford & Bingley, has today raised £300 million in an emergency rights issue to shore up its balance sheet.

It is the latest UK bank to ask its shareholders for additional funding and confirmed it would raise the £300 million in a rights issue, which offers existing investors the opportunity to purchase additional shares.

Shareholders will be given the opportunity to purchase 16 new shares for every 25 they already own at a price 48% below their closing price yesterday.

Shares in the bank have fallen significantly this year as it was regarded one of the lenders that took a higher proportion of its funding from wholesale money markets rather than savers. The bank said the extra funding would enhance its capital position and make up for some of its weakening investments.

Commenting on the rights issue, Steven Crawshaw, Bradford & Bingley’s chief executive, said the improved financial strength will ensure we are even better placed to pursue our strategy of providing high quality savings and mortgage products in a competitive market.

The news follows plans for rights issues from other UK banks including HBOS and Royal Bank of Scotland who are looking to raise £4 billion and £12 billion respectively.

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