Underwriters are stuck with almost £2.6bn of HBOS stock after failing to offload the remaining shares in the lender's £4bn rights issue.
Lead underwriters Dresdner Kleinwort and Morgan Stanley called off the placing period a day early yesterday after moving a further 29.53% of HBOS shares to sub-underwriters and fund managers.
Existing HBOS shareholders took up just 8.29% of the new shares by last Friday’s deadline.
Dresdner and Morgan will now take some of the remaining 62.18% onto their books, while offloading further stakes to financial institutions previously agreed to be sub-underwriters.
The underwriters took a £100m paper loss last night, after HBOS stock closed down 6% to 264.5p – well below the 275p rights issue price.
HBOS stock has continued to slide in early Tuesday trading, 2.27% lower to 258.5p.IFAonline
Putting the tech into protection
Square Mile’s series of informal interviews
Fallout from Haywood suspension
Launching later in 2019
£80bn funds under calculation