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Text size [+][-]  Saturday November 21 2009GLOBAL EDITION

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18 Apr 2008 12:46

The Rights math



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Goldman Sachs and Merrill Lynch are working on a rights issue for the Royal Bank of Scotland, according to the Daily Telegraph.

RBS shares were trading up 2% at 12.30pm on Friday.

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That would get its equity capital ratios up to a more comfortable level. Given such a mega rights issue, there would have to be a deep discount. As a result, the market is likely to be flooded with perhaps 50% more new shares.

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