Banks who are backing a share issue at British lender Bradford & Bingley are to buy the 72% of shares not taken up by shareholders. This is because the fall in the bank's share price has made it impossible to find other investors.
Investment banks Citi and UBS were left with the bulk of the mortgage lender's £400m rights issue when it closed this morning with shares hovering just above a deeply discounted 55p price. Only just under 28% was sold to shareholders.
The banks had until today's close to place the rest of the shares, but B&B shares have languished well below 55p for much of the week.
B&B said the two banks and sub-underwriters would be subscribing to the remaining 597 million shares at 55p each after telling the lender no buyers were likely to emerge.
The lenders also confirmed a lock-up agreement under which they will not sell 426 million shares for 20 days. Citi and UBS are expected to end up with as much as £75m worth of shares.
