Paragon Shares Down

Paragon, the buy to let lenders, is to raise £287m through a discounted rights issue to fill the gap left by the credit crunch.

Their share prices have dropped by about 30% today.

Out of the money, a £280m loan, due at the end of February, will be paid and will ensure that they have no debt due to mature before 2017.

The terms of the rights issue have been underwritten by UBS and shareholders will be offered the opportunity to purchase shares in the group at a discount of around 90% on 10th January closing price of 102p.

Paragons chairman state it will give them a platform on which further funds can be pursued and the Company will be able to write a considerable amount of profitable business when the credit markets reopen.

Paragon’s take-up issue

Paragon have stated that it is still very confident about the take-up of it rights issue. This has been wholly underwritten by UBS and closes this week.

Last month Shareholders agreed to a large discounted rights issue so that Paragons £280m corporate facility could be repaid by the end of this month.

Speculation is now that UBS may end up with unwanted stock because of the fall in Paragon share prices. They could also have a major stake in the company if the rights issue was to be under subscribed.

It is considered Paragon is playing down fears by saying that there would be a high take-up.

CHL to lend in Isle of Wight

CHL Mortgages are now to lend on properties on the Isle of Wight.

They are to offer buy-to-let, homeloan and commercial mortgages to borrowers purchasing and remortgaging property on the island.

CHL intend to work closely with local firms to ensure they get the most from their client base and business.