HBOS CEO says rights issue on track

Thu Jun 19, 2008 7:57am BST
 
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LONDON (Reuters) - HBOS HBOS.L is confident its 4-billion-pound rights issue is on track and will go ahead even if shares fall back below the underwriting price, its chief executive said on Thursday.

"We're underwritten and this rights issue is going ahead. It's as simple as that. We are not for turning," Chief Executive Andy Hornby told Reuters in a telephone interview.

Last week, HBOS was forced to publish a statement that the deeply discounted rights issue was going to plan after its shares slumped to their lowest level since the firm was created in 2001 and below the 275 pence underwriting price.

A sharp share fall at rival mortgage lender Bradford & Bingley BB.L forced the bank earlier this month to slash the price of its rights issue and bring in an outside investor.

HBOS said its exposure to the beleaguered housebuilder sector totalled 4.2 billion pounds at the end of May, amounting to less than one percent of its total balance sheet.

Hornby said the group had written down its equity exposure by 0.1 billion pounds to 0.1 billion, but was confident the value of debt was underpinned by collateral values including landbanks.

"I am confident we have taken prudent view of the book at the moment," he said.

(Reporting by Clara Ferreira-Marques, Editing by Mark Potter)

 
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