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While today’s decision by the Bank of England MPC was literally a no brainer it does not help the thousands of home owners who are struggling to make ends meet. As we read another report from the...
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Saturday 19th July 2008
Rumours that HBOS will be forced to announce that existing shareholders took up just 10% of the groups recent £4 billion rights issue are growing stronger in the City. If this is correct then the fund raising would be one of the worst ever seen in the City and severely dent the reputation of this once great banking institution. Underwriters will be left with £3.6 billion of stock between them, costing 275p per share against a current share price of just 254p.
The problem now is that underwriters Morgan Stanley and Dresdner will be on the lookout to bail out the shares if they ever make it back to around the 275p level, leaving a large seller hanging over the share price for the immediate future. While HBOS cannot be left to take all of the blame for the debacle it is a prime example of how the mighty have fallen during this ongoing credit crunch.
Who would have guessed 12 months ago that we would see on of the UK’s largest banks struggling to finish a fund raising needed to refinance the bank? Who would have guessed that the big institutional investors would desert them? |
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