As a result when Santander this November announced that it would bow to investor pressure and raise capital to lift its tier 1 ratio to 7% from 6.3% through a €7.2 billion rights issue to be completed by the end of the month, many leading investment banks rushed to say that they would be willing to commit capital at a 35% discount if they were appointed as bookrunners on the transaction.
Yet as the market digested the news and the bank’s share price fell 3%, the bank found that some of the investment banks that had only very recently indicated their willingness to commit capital at a 35% discount were turning down offers to act as bookrunners on the deal even though the discount had been widened to 40%.
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