Helped secure a successful £287 million fundraising for Paragon in early 2008 at the onset of the credit crunch by communicating the buy-to-let lender’s underlying financial strength to the media and investors.
The challenge
Paragon was the first financial services company to launch a rights issue following the onset of the credit crunch, and wanted to emphasise the financial strength and prudent business model that set it apart from the banks experiencing genuine financial difficulties.
Our response
Paragon launched the rights issue in a hostile environment where financial stories usually restricted to business sections were being sensationalised in the news pages. We focused our approach exclusively on key financial journalists and starved the story of oxygen by not engaging with the broader media. We presented the rights issue as a technical story suitable for business sections rather than a general news story. As the credit crunch deepened, the key objective was to distance Paragon from the banks in financial difficulties.
Results
The rights issue was highly successful, with strong shareholder take-up. There was little appetite for follow-up by the media and the story was kept to a minimum, restricted to key target publications. Paragon also avoided contagion from other financial institutions experiencing negative publicity. The reputational work undertaken at the time of the issue helped to strengthen relationships with key financial journalists.
