Butterfield Bank is hopeful that a substantial portion of the $200 million of preferred stock it is issung with Government guarantees will be subscribed by private buyers.

In an historic agreement announced last Friday, Government agreed to guarantee the principal and dividends on the shares and to purchase any of the stock not snapped up by the private sector by the end of June.

"With respect to interest in the preferred share issue, we have received many calls from interested investors, especially locally, and we are very optimistic about the possibility of the bulk of the preference share issue being subscribed by private investors," a Butterfield Bank spokesman said yesterday. Businessman and former Premier Sir John Swan is one of those who fully supports the deal and intends to subscribe.

The bank undertook the capital raise to ensure it has a "capital buffer" - as required by regulator the Bermuda Monetary Authority - to be able to withstand an acute deterioration in economic conditions.

Asked about the reaction s to Friday morning's announcement, the spokesman said: "Some of our customers had questions about the nature of the support that is being provided by Government for Butterfield's capital raise.

"When we provided them with details, generally customers viewed the actions we are taking as positive.

"Reaction from our depositors has been generally good. Overall, we are quite pleased with our deposit levels, which have been steady."