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Paragon shares its buy to let mortgages problems

14/01/2008

Paragon, one of the UK’s largest lenders for buy-to-let mortgages has asked potential investors for £287m to keep their business afloat.

Paragon is looking to sell new shares to certain investors at 90% discount. This has been the first UK lender to work in conjunction with investors for large sums of cash.

The third-largest provider for mortgages via buy-to-let stated the rights issue. The cash will be generated and used to repay a syndicate of banks who had given a revolving £280m last year.

During November paragon warned it would need to heave such a sum from investors because of complications in financial markets, this was making it virtually impossible to refinance debts.

The firms confirmed that plans to maintain and elevate its buy-to-let lending in the future will be difficult and they will try to raise such funds to achieve these goals.

The lender is thinking of keeping its ‘for sale’ sign high up, confirming this has potential value to anyone wanting to get into or increase their status in the UK buy-to-let market.


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