Bradford & Bingley sent shockwaves through the banking sector yesterday when it took the extraordinary step of renegotiating its £300m rights issue amid concerns it would face a “fight with the underwriters” if it tried to force the offering through on its original terms.
The UK’s biggest buy-to-let mortgage lender announced a profits warning saying it would make losses of £8m in the first four months because of rising arrears in its mortgage book.
The dire trading was disclosed to B&B’s board 11 days before yesterday’s announcement to the market – and just nine days after its rights issue was announced.
The Financial Services Authority was aware of the problem and took part in talks on how to tackle it.
Financial Times, The Times, Daily Telegraph