Not even a positive announcement could stop the Bank of Queensland Limited (ASX: BOQ) share price from dropping lower today.
In morning trade the regional bank's shares are down almost 1% to $7.33.
What did Bank of Queensland announce?
This morning Bank of Queensland announced the successful completion of its share purchase plan.
According to the release, the share purchase plan closed at 5pm Sydney time on Friday December 20 and raised a total of approximately $89.7 million.
Approximately 12.3 million ordinary shares are to be issued at an issue price of $7.27 per share. This represents a 2% discount to the volume weighted average price of its shares traded on the ASX between December 16 and December 20.
The amount raised is materially more than planned. Bank of Queensland was aiming to raise $25 million from shareholders, but instead decided to accept all valid applications from 6,803 eligible shareholders in full with no scale back.
Combined with its fully underwritten $250 million institutional placement, the bank has raised a total of $339.7 million from investors.
Why is Bank of Queensland raising funds?
Bank of Queensland raised these funds in order to strengthen its balance sheet, provide an increased buffer above APRA's unquestionably strong Common Equity Tier 1 (CET1) capital ratio benchmark, and create additional capacity to implement its strategic priorities.
The original offer was expected to add approximately 80 to 88 basis points to its Level 2 CET1 capital ratio. However, given that it has raised almost 25% more funds than originally planned, the positive impact on its Level 2 CET1 capital ratio is likely to be even greater.
What now?
Bank of Queensland expects the new shares to be issued on Thursday January 2 2020.
After which, they are due to commence trading on the ASX a day later on Friday January 3 2020.
