Businessman and former Premier Sir John Swan approves of the capital-raising deal between Butterfield Bank and Government - so much so that he intends to invest in it.

Sir John yesterday said the $200 million of preferred stock being sold by Butterfield and guaranteed by Government was "a real investment opportunity".

He praised Butterfield, financial regulator the Bermuda Monetary Authority and the Government for a "prudent" move.

The bank announced it would carry out the capital raise, backed by Government, to comply with tougher requirements from the BMA for a "capital buffer" to ensure the bank could withstand a dramatic worsening of economic conditions.

"I absolutely believe it's a sensible step," Sir John said yesterday. "It's always best to deal with a problem before it arises."

He said the move gave Bermudians and non-Bermudians alike a rare opportunity to invest in preferred shares — which are expected to yield a much higher interest rate than savings accounts — that are backed by the Government.

"It is, therefore, my intention to be one of the early purchasers of Butterfield bank's preferred shares as this will represent both my confidence in the bank and the Bermuda economy," Sir John said.

"Moreover, I believe the preferred shares will be a complement to the already conservative nature of my own investment portfolio.

"I believe that the global financial situation will continue to deteriorate for a while longer; however, I feel that by taking early action Butterfield Bank, the BMA and the Government will assist us all through these challenging times."

He said the bank might find it could find private-sector buyers for all the preferred stock. Government has agreed to buy any of the shares not snapped up by the private sector by the end of June.

Trading in Butterfield's common stock, which was suspended by the Bermuda Stock Exchange last Friday, resumed. The shares fell ten percent to $6.50, taking their decline to 37 percent this year, equalling their 37 percent fall in 2008.