Argus Group Holdings Ltd. saw the value of its substantial stake in Butterfield Bank tumble further yesterday, as Butterfield closed at $2 on the Bermuda Stock Exchange.

Until Tuesday, when it was announced that new investors had bought $550 million of new Butterfield equity, Argus's holding of more than 6.8 million common shares, according to Bloomberg data, amounted to a seven-percent stake in the bank.

Argus chief executive officer Gerald Simons said yesterday the insurer had written down its Butterfield investment over the past two years and had anticipated further decline.

"The price of the bank's shares will be reflected in our results," he said.

Bank shareholders will have the chance to take advantage of a $130 million rights issue next month, giving them the option to buy Butterfield shares at $1.21 apiece — the same price paid by the new institutional investors.

"We will look at the rights issue when it comes out," Mr. Simons said. "We'll be monitoring the bank's share price and make a decision at the appropriate time."