Bradford & Bingley raises £300m at big discount
Mortgage lender Bradford & Bingley has confirmed overnight reports and unveiled a cash call to raise approximately £300m, net of expenses, in a 16 for 25 rights issue at 82p.
The issue price is a 36% discount to the theoretical ex-rights price and a 48% discount to the closing price last night. The 2008 interim dividend, due in October 2008, is to be paid in shares with a new target for underlying dividend cover of between 2.0 to 2.5 times underlying earnings.
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"Taking into account the rights issue and write-downs announced in the group's interim management statement released on 22 April 2008, the group would have had a pro-forma Tier 1 ratio of 10.1% and a pro-forma Core Tier 1 ratio of 9.2% as at 31 December 2007," it said.
"The rights issue we have announced today will strengthen our financial standing, reinforcing our position as one of the better capitalised banks in the UK. 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," chief executive Steve Crawshaw added.
