HBOS Underwriters left with £2.6bn of stock

Following HBOS recent £4bn rights issue, their underwriters and sub-underwriters are now left with £2.6bn of the bank’s stock, as investors failed to purchase more than 30 percent of the shares from leftover cash.

Just 8.3 per cent of HBOS shareholders took up the rights to buy new shares, which had closed on Friday. Underwriters Morgan Stanley and Dresdner Kleinwort who fully underwrote the capital rising, they sold another 29.5 per cent at the rights price of 275p on Monday.

Both investment banks will now take at least 40 per cent of the stock; they will now have 932 million shares.

The reason that the take-up for the rights issue was so low was because HBOS shares traded under the offer price just days before the lead up to the closing offer.

HBOS shares along with a number of other UK banks had been battered as a result of the current economy and the constant threat of a recession.

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