Shares in the UK’s third-largest buy-to-let mortgage lender, Paragon, have lost neary 40% after the firm said it faced funding problems.
Paragon said the recent turmoil in the global credit markets had hit its normal sources of finance.
As a result, it said it could launch a £280m rights issue if it failed to find other financing by the end of February.
Paragon’s shares have already fallen by 70% this year on fears it might not be able to raise sufficient funds.
Paragon raises its funding largely through securitisation, under which it bundles up its loans and sells them on.
However, since the recent credit crisis, triggered by problems in the US sub-prime mortgage market, the securitisation market has dried up.
The Morning Star reports that the labour movement is moving to promote the interests of Northern Rock employees, and that savers are switching to building societies to find peace of mind:
BANKING union Unite will launch a “charter for Northern Rock and future stakeholders” in Newcastle on Wednesday.
The six-point charter sets out the union’s expectations for Northern Rock’s management and any future stakeholder in the bank.
The charter will be signed by Unite deputy general secretary Graham Goddard outside a branch of Northern Rock in the city.
Mr Goddard said that it was vital that Unite was recognised as a stakeholder in the bank’s future.
“Over two months of speculation about the future of Northern Rock has left employees feeling insecure about their jobs,” he said. “Regardless of who owns the bank, Unite expects them to support this employee charter.
“As well as the protection of employee terms and conditions, Unite is seeking assurances about the long-term security of the Northern Rock Foundation.
“We will be looking for any future stakeholders within Northern Rock to sign up to the Unite charter and to retain the bank as a UK-listed company,” said Mr Goddard.
Record levels of savings were paid into building societies during October as the sector continued to benefit from the problems at Northern Rock, according to the Building Societies Association.
A record £15.38 billion was paid into building society savings accounts during the month, as beleaguered Northern Rock savers continued to look for new homes for their money.
Once withdrawals were taken into account, savings levels at building societies rose by £3.02 billion, the highest ever figure, beating the previous record of £2.81 billion set in September, when Northern Rock’s problems first emerged.
The figure was also nearly four times higher than net deposits of £772 million made in October last year.