Brisish Bank HBOS can’t sell shares - no one wants to buy them

Posted: July 20, 2008 at 2:31 pm by Chuck

610x The UK Times is reporting today that the Halifax Bank Of Scotland (HBOS) will announce tomorrow a disastrous attempt to raise capital. Less than 10% of the investors wanted to buy the share offering.

THE high-street bank HBOS will tomorrow admit to one of the most disastrous rights issues in corporate history when it concedes that as few as 10% of its investors took up its £4 billion share offer.

Its two underwriters, Morgan Stanley and Dresdner, will have to place £3.6 billion of shares over the course of Monday or Tuesday.

If they are unable to place the shares at the rights-issue price of 275p or above, they will be forced to take them on to their own balance sheets. [...]

The full story can be found HERE

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3 Responses to “Brisish Bank HBOS can’t sell shares - no one wants to buy them”

zzyzx on July 20th, 2008 2:54 pm

I wonder what would happen if the proposed FRE common offering happened in the same fashion? Would the Fed. or the Treas. pick up the remaining shares?
Ex15:26 on July 20th, 2008 4:49 pm

Let’s all celebrate! I’m sure that HBOS will rally hard tomorrow along with MS because they’ll get to keep all the shares for themselves!

I’ve got my tinfoil hat on and a call in to the PPT to make sure that we make extra room on the Fed balance sheet for our friends across the pond.
Jim on July 20th, 2008 7:33 pm

The selective protection of 15 banks/brokers by the SEC will be expanded and reexpanded. Few can raise capital unless protected by the SEC short sale prohibition.

Total estimated bad loans are now expected to exceed $1.6 Trillion worldwide (According to Bridgewater Associates). This assumes housing prices stabilize.
Either lending will be curailed by $12 Trillion or a new $12 Trillion of equity capital is needed by the banks. Credit is contracting worldwide faster and faster.

August unemployment report issued by BLS will likely be very negative as the insane “birth/death” adjustments that have kept the reported number positive this year are adjusted.

$50 billion deficits on the State, County and City level will likely force large layoffs within six months.

Will the FED guaranted $20 billion new bonds required by California??

This recession is very different from the past ones. The US has a serious banking crisis and the the US dollar is weak. This is spilling over to high inflation rates and weak economies throughout the world.