businesses of the Bank of Bermuda and LP Gutteridge, which holds over 50 percent of the Island's mortgages, opened its rights offering yesterday.

Mr. Donald P. Lines, chairman of Bermuda Home Limited, announced a rights offering yesterday of 628,350 rights units consisting of one convertible preferred share and one common share at $16.50 per rights unit.

The proceeds will be used to support additional lending and to further improve the company's capital position, according to a release from Bermuda Home.

The Bank of Bermuda will host two public presentations in the Adam lounge of the Princess Hotel in Hamilton on June 30 and July 18 at 5.15 p.m.

"The rights offering will improve the company's already strong capital base and position us for continued growth and expansion,'' Mr. Lines said.

Bermuda Home is currently the largest deposit company in Bermuda in terms of mortgages, deposits and total assets. After completion of the rights offering, it is anticipated that the company will also have the largest capital base in the Bermuda mortgage and finance industry. This capital infusion will provide depositors with an additional financial cushion, further strengthen the financial position of the company and finance new mortgages for residents of Bermuda, Mr. Lines added.

"The Bermuda Home limited rights offering is another important step in the development of the local capital market. We continue to believe that the Bank of Bermuda will add to the depth and liquidity of the capital market in Bermuda by underwriting the public offerings of high quality domestic companies,'' said Mr. Peter Mellor, chief investment officer with the Bank of Bermuda.

Each holder of Bermuda Home common shares of record on June 17 is granted one right for each common share registered in their name on that date. Four rights entitles the holder to acquire one unit. No fractional units will be issued.

A rights offering prospectus and allotment letter was mailed to the Company's shareholders yesterday, June 27 and rights became effective and can be exercised until 3 p.m. on July 22.

Financial Advisory Services, the Bank of Bermuda's Investment Division's corporate finance department, has arranged and managed the rights offering for Bermuda Home while Bermuda International Securities Limited, the stock brokerage subsidiary of the bank, has underwritten the issue.

The rights may be transferred in whole or in part at the discretion of the holder.

The common shares of Bermuda Home were listed on the Bermuda Stock Exchange on June 9.

At the company's annual general meeting on June 8, the shareholders approved the creation of 928,350 eight percent non-cumulative convertible preferred shares of a pair value of $1 each with an issue price of $10 each.

At the board meeting on June 9, the directors approved the issue of the preferred shares.

At the June 9 board meeting, the directors also approved the issue of 928,350 common shares of a par value of $1 each with an issue price of $6.50.

The prospectus indicates a possible net rights offering proceed of $14,434,830, potentially increasing the companies shareholder's equity to $39,434,830.

An application to list the rights and preferred shares of the company has been made to the exchange.

The preferred share holders shall be entitled in priority to any payment of dividend on any class of shares to a fixed non-cumulative preferential dividend at the rate of eight per cent per annum of the issue price. The preferred shares shall be converted at the option of the price holder at any time at a conversion ratio of one resulting in a conversion price of $10. For example, one preferred share may be converted to one common share, subject to adjustment. Shares are not redeemable by the company.

Mr. Arthur E. Haycock, President of Bermuda Home said: "The demand for loans to purchase houses and condominiums in Bermuda has the potential to increase during the remainder of the decade due to certain demographic trends and macroeconomic factors.

The domestic population between ages 25 to 44, which represents the primary market for new mortgages, has been growing at a more rapid pace than the overall population. The domestic economy has entered a period of recovery following the recession which caused a sharp reduction in the construction of new houses and condominiums from 1991 through 1993.''