May 20, 2008 / 1:29 PM / 11 years ago

Sovereign Bancorp boosts capital raising to $1.9 bln

May 20 (Reuters) - Sovereign Bancorp Inc SOV.N, the second-largest U.S. savings and loan, on Tuesday said it completed offerings of $1.9 billion of equity and debt to bolster its capital base, after boosting the stock offering by 15 percent to meet demand.

The Philadelphia-based thrift said it issued 179.7 million shares at $8 each, generating net proceeds of about $1.39 billion. It also sold $500 million of 10-year subordinated notes with an 8.75 percent coupon.

“By proactively taking action to raise additional capital we feel we are well equipped to handle any further deterioration in the economy,” Chief Executive Joseph Campanelli said in a statement. The bank said its capital ratios are now in line with or above the average for its peer group.

Sovereign is one of many banks to raise capital in recent months as the slumping economy and deteriorating housing market cause credit losses to increase. Before the offerings, Spain’s Banco Santander SA (SAN.MC) had a more than 24 percent stake in the thrift. (Reporting by Jonathan Stempel in Bangalore; Editing by Anil D’Silva) ((; +1 646 223 6317; Reuters Messaging: b

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