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| B&B fund-raising effort rescued | B&B fund-raising effort rescued |
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| Efforts by troubled UK lender Bradford & Bingley to raise £400m have been rescued after a would-be investor pulled out, the BBC has learned. | Efforts by troubled UK lender Bradford & Bingley to raise £400m have been rescued after a would-be investor pulled out, the BBC has learned. |
| US private equity house Texas Pacific Group (TPG) has made a last-minute decision to walk away from a deal to provide almost half of the equity. | |
| But leading City institutions have rallied round to provide the capital, says BBC Business editor Robert Peston. | But leading City institutions have rallied round to provide the capital, says BBC Business editor Robert Peston. |
| There should be no concerns about B&B's fundamental soundness, bankers say. | |
| TPG had pledged to pay £179m for a 23% stake in the lender. | TPG had pledged to pay £179m for a 23% stake in the lender. |
| But it backed away from investing the new money after Moody's, the credit rating agency, announced it was downgrading the debt of B&B. | But it backed away from investing the new money after Moody's, the credit rating agency, announced it was downgrading the debt of B&B. |
| It would have been disastrous for confidence in the bank if new money was not found to replace TPG Robert PestonBBC Business Editor Read Robert's blogQ&A: B&B's woes | |
| The rest of the £400m is to come from shareholders in a rights issue. | |
| Share fears | |
| The city watchdog, the Financial Services Authority, has played a central role in helping to organise what will be seen as an emergency fund-raising, our business editor said. | The city watchdog, the Financial Services Authority, has played a central role in helping to organise what will be seen as an emergency fund-raising, our business editor said. |
| The institutions behind the rescue are the ones that were behind Clive Cowdery's recent attempt to take control of B&B. | |
| Mr Cowdery walked away after he was refused access to B&B's books by the bank's board, led by the chairman, Rod Kent. | |
| "It would have been disastrous for confidence in the bank if new money was not found to replace TPG," said our business editor. | |
| "TPG's decision to turn its back on B&B, having initially been characterised as the brave rescuer of the bank, may well lead to it facing criticism." | "TPG's decision to turn its back on B&B, having initially been characterised as the brave rescuer of the bank, may well lead to it facing criticism." |
| Mr Kent's decision to pin his hopes on TPG now look to have been misplaced, our business editor added. | |
| "Some shareholders may question whether he should remain at the helm of the bank." | |
| Observers say that B&B's shares are likely to be hit when trading opens on Friday on the back of the Moody's downgrade. | |
| Investment group Resolution last week pulled out of a deal to invest in B&B. | |
| Under Resolution's plan, the group would invest £2bn in the sector over the next two years, bringing together banks and lenders hit by the credit turmoil to create a "new, larger and stronger bank". | |
| But B&B rejected the plan, refusing to open its books to Resolution saying it would mean Resolution in effect taking control of the company. |