Bradford & Bingley plunge 25%

Bradford & Bingley shares plunged to fresh lows today amid mounting fears that the stock is worthless.

Bradford & Bingley shares plunged to fresh lows today amid mounting fears that the stock is worthless.

The UK buy-to-let lender saw shares drop 25% at one stage to just 30p – almost half the 55p rights issue price offered to shareholders under its cash-call.

One London market firm cut its target price for the bank to “zero” in the wake of its credit rating downgrade last week by Moody’s and the decision of private equity firm TPG to withdraw its £179m (€225m) investment.

Today’s latest stock price fall increases the chances that the banks and shareholders underwriting B&B’s troubled fundraising plans will see potential losses of more than £100m (€126m).

The share losses threaten investor take-up in the £400m (€503m) rights issue, which may leave the underwriters forced to buy the shares and suffer hefty paper losses.

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