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HBOS in trouble

| 11 June 2008 21:30

In April, I wondered aloud where HBOS was in this crisis in a post called “Where’s HBOS?”. Now, we know they are not immune to the problems infecting global finance.

The Guardian has reported on the difficulty HBOS is having raising money in the capital markets as its share price has fallen below the price of its offering.

“HBOS, the country’s biggest lender, was last night desperately defending its fundraising plans after its shares slumped to record lows, putting its £4bn cash call under severe pressure.

Shares dived through the 275p level at which the Halifax and Bank of Scotland group is trying to convince its shareholders to support a rights issue it needs to bolster its capital base.

The shares ended the day at 258p, down almost 12%. Other bank shares also touched new lows. Royal Bank of Scotland, which issued a subdued trading statement yesterday, ended at 212.2p, down 9% and barely above the 200p at which its rights issue, which ended last week, was priced. Alliance & Leicester ended 8% lower and Barclays was 4% down.
-The Guardian, 12 Jun 2008“

All hell is breaking lose in global finance. The second leg down in this credit writedown bonanza has now officially begun.

See the Credit Crisis Timeline for a full list of writedowns by institution.

See also: Other posts under the label ‘UK.’

Update: Related articles
2007 08 21 HBOS forced to tap balance sheet in illiquid markets
2007 12 14 HBOS shares slide on credit writedowns
2008 04 29 HBOS Plans to Raise 4 Billion Pounds in Share Sale
2008 04 30 HBOS dividend cut highlights need for reform
2008 06 19 HBOS writes off £1bn and warns on house prices

avatar About Edward Harrison

Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty years of business experience. He is also a regular economic and financial commentator on BBC World News, CNBC Television, Business News Network, CBC, Fox Television and RT Television. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College. Edward also writes a premium financial newsletter. Sign up here for a free trial.

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