Bermuda investors snapped up more than a 95 percent stake in Butterfield Bank's preference shares prior to the bank officially closing its offering yesterday.

The offering, which was fully subscribed by private investors, including the Island's residents and institutions, saw $200 million worth of Government guaranteed shares with an eight percent dividend issued at the start of this month and all purchases successfully concluded yesterday.

The bank, which was inundated with requests and said it a had a significant oversubscription, also revealed that investors with a minimum investment of $10,000 can sign up for the US dollar Step Up term deposit, offering a cumulative interest payout of 7.46 percent over a three-year term.

The preference share principal and dividend payments are guaranteed by Government and carry a rating of Aa2 from Moody's and AA+ from Fitch. They will be listed on both the Bermuda Stock Exchange and the Luxembourg Stock Exchange, trading on the Euro MTF Market.

Government, which had pledged to buy any of the shares that were not purchased, did not need to buy any.

The bank received $200 million (less commissions and offering expenses) in proceeds from the issue, which will be used for general corporate purposes and working capital.

The net proceeds of the share issue will be treated as tier 1 capital by the Bermuda Monetary Authority.

Alan Thompson, Butterfield Bank's president and CEO, said: "Our objective was to create a capital buffer to help us withstand a severe and prolonged economic downturn.

"We achieved that – raising $200 million of new tier 1 capital – without the need for the Government to invest in the issue.

"We couldn't have hoped for a better result.

"I would like to take this opportunity to acknowledge the Government's support of the bank and, once again, thank them for the guarantee they provided. We believe it was a significant factor in the successful placement of the issue."

Mr. Thompson said the share issue was oversubscribed by a significant margin, reflecting the strong interest from local investors.

"Although over-subscription is not unusual with equity offerings of this nature, I believe the strong interest in this issue is a reflection of the pride that Bermudians have in their local Bank and the confidence they have in Butterfield's and Bermuda's futures," he said.

"All subscribers who submitted their applications by the close of business on 11 June were able to participate in the issue, and we allocated the available shares among those subscribers equitably; our goal was to ensure that participation in the issue was shared among a wide cross section of investors in our community."

Any investors who qualify for the US dollar Step Up term deposit can visit their local Butterfield Banking Centre, contact their relationship managers or log on to the bank's website at www.butterfieldgroup.com