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Coventry BS looks at finance options for Rock bid

Coventry Building Society is looking at a range financing options through which it could raise enough money to buy state-backed bank Northern Rock.

According to Sky News, the building society has begun exploring options such a permanent interest bearing shares – a special type of share issued by building societies which pays a fixed amount of interest – which would be sold to new investors.

Sky estimates Coventry would have raise around £300m to £400m and says the building society has held talks with the FSA to ensure Pibs count as core tier one capital.

Coventry first revealed its interest in the bank last month, which was followed by an announcement by Yorkshire Building Society saying it would also consider a bid when the lender is put up for sale.

 Meanwhile, Nationwide yesterday ruled itself “out of the running” for the bank.

Northern Rock was nationalised in 2008 after the first run on a British bank since the late 19th century.

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