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| HBOS investors snub share issue | HBOS investors snub share issue |
| (10 minutes later) | |
| Investors in UK bank HBOS have overwhelmingly declined the chance to buy new shares in it. | Investors in UK bank HBOS have overwhelmingly declined the chance to buy new shares in it. |
| The bank has announced that just 8.29% of the new shares offered in its £4bn rights issue were taken up. | The bank has announced that just 8.29% of the new shares offered in its £4bn rights issue were taken up. |
| HBOS shares were available on the stock market for less than the 275 pence issue price last week, making it unattractive to shareholders. | HBOS shares were available on the stock market for less than the 275 pence issue price last week, making it unattractive to shareholders. |
| However, HBOS will still get the £4bn it wanted, as the unsold new shares will be bought by issue's underwriters. | |
| Morgan Stanley and Dresdner, who are the underwriters, have two days to find buyers willing to pay at least 275p a share before they have to buy the shares. | |
| 'Fierce financial storm' | |
| When HBOS launched its rights issue in April, its shares cost about 500p. | When HBOS launched its rights issue in April, its shares cost about 500p. |
| Shareholders were offered two new shares at the then heavily-discounted price of 275p for every five shares that they already owned. | |
| See HBOS's share price over past three months | |
| Since then, concerns about the housing market and fears about further write-downs in the banking sector have weighed heavily on shares. | |
| "The rights issue was conducted in the middle of a fierce financial storm, we saw unprecedented volatility in bank stocks," a spokesman for HBOS said. | |
| But the bank stressed that it had still managed to raise £4bn. | |
| HBOS is one of a host of leading British banks to tap their shareholders for extra cash to strengthen their balance sheets as the fallout from the credit crunch continues. | HBOS is one of a host of leading British banks to tap their shareholders for extra cash to strengthen their balance sheets as the fallout from the credit crunch continues. |
| The Royal Bank of Scotland has raised £12bn while Barclays has secured £4.5bn in new funding from a range of foreign investors. | The Royal Bank of Scotland has raised £12bn while Barclays has secured £4.5bn in new funding from a range of foreign investors. |
| Barclays announced last week that 19% of its new shares had been taken up by existing investors. | Barclays announced last week that 19% of its new shares had been taken up by existing investors. |