European markets declining for a second session on pressure from RBS (Reuters) (22-04-2008)

PARIS, April 22 (Reuters) - European stocks continued the previous session’s decline from the start of trading on Tuesday, as a massive rights issue from Royal Bank of Scotland weighed on the banking sector.

The decline was offset by rallying energy and mining shares, gaining ground as commodity prices remained near historical highs.

At 0834 GMT, the FTSEurofirst 300 index of top European shares was down 0.3 percent at 1,307.49 points.

RBS announced a record 12 billion pound ($24 billion) rights issue to cover a potential 5.9 billion pound writedown on the value of shaky assets and help rebuild a stretched balance sheet.

RBS will offer 11 new shares for every 18 existing shares at 200 pence per share in the rights issue, Europe's biggest ever, representing a 46 percent discount to Monday's closing price.

Its shares were down 5 percent at 353.75 pence. The theoretical ex-rights price for the shares is 307p, according to Reuters calculations.

The DJ Stoxx European bank index was down 1.2 percent, with the UK lenders among the most hit. Barclays was down 4.4 percent and HBOS down 5.5 percent.

Another lender ran into problems linked to the financial market crisis on Tuesday, with Germany's BdB banking association taking control of German property lender Duesseldorfer Hypothekenbank.

Source Reuters