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July 7, 2008

B&B revisits £400m right issue as TPG walks away

by Gill Montia

Story link: B&B revisits £400m right issue as TPG walks away

Bradford & Bingley (B&B) has revised its fundraising plans and reverted to its original decision to raise up to £400 million from shareholders in a rights issue.

At the beginning of June, the buy-to-let lender announced that it would be shoring up its balance sheet with an injection of £179 million from private equity firm, Texas Pacific Group (TPG), enabling B&B to reduce the amount of cash raised in a rights issue to £258 million.

However, TPG has withdrawn from the deal following the news that credit ratings agency, Moody’s, has cut the bank’s rating from A3 to Baa1.

Moody’s says it expects the quality of the bank’s assets to deteriorate and the level of arrears on its buy-to-let loans to increase in the months ahead.

On 2nd June, the lender reported that the number of borrowers who were more than three months in arrears with their mortgage payments had risen from 1.63% to 2.16% during the previous four months, adding that it expected the trend to continue.

 

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Related stories to: B&B revisits £400m right issue as TPG walks away

B&B shareholders vote in favour of £400m rights issue  ...

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