Bradford & Bingley is hoping its £400m rights issue, which closes this morning, will attract greater shareholder support than the disastrous capital raising of rival HBOS, though a large chunk of shares is still expected to end up in the hands of underwriters.

B&B’s rights issue has proved controversial. The buy-to-let lender has been forced to restructure it twice – the first time following a shock profit warning in June and the second after private equity group TPG pulled its support in July.

Following TPG’s exit, B&B’s largest institutional investors stepped in to help rescue the rights issue.

B&B shareholders have until 11am today to take up their new shares, although the bank will not know the outcome until the weekend.

Shares in B&B have been hovering about the 55p rights issue price for several weeks, though last night they closed at 54.75p, down 0.25p.

Financial Times