The lender wants to achieve approximately £300 million, net of expenses, in a 16 for 25 rights issue at an issue price of 82 pence per Bradford & Bingley share. This represents a 36% discount to the theoretical ex-rights price and a 48% discount to the closing price of Bradford & Bingley shares of 158.75 pence per share on 13 May 2008, the last trading day before the announcement.
The proceeds of the rights issue will strengthen the Group's capital position and will mitigate the impact of the previously announced reductions in the value of certain of the Group's treasury investments, according to the company.
The Group's strengthened capital position will:
• Further support the Group's funding programme
• Enhance the Group's competitive position
• Improve the Group's regulatory capital ratios
Commenting on the news, Steven Crawshaw, group chief executive 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.”
