LONDON (AP) - Bradford & Bingley plc. (B&B) said on Friday it is revising its plans to raise new capital after US private equity fund Texas Pacific Group (TPG) pulled out of its agreement to invest more than $350 million in the mortgage banker.

TPG withdrew after Moody's rating service downgraded Bradford & Bingley's long-term debt ratings from A3 to Baa1. TPG's agreement to invest 179 million pounds ($356 million) in B&B included an escape clause in the event of downgrading.

B&B, a specialist in mortgages for the purchase of rental properties, now hopes to raise £400 million ($800 million) entirely through a cash call to shareholders.

The rights issue is supported by major shareholders M&G Investment Managers, Legal & General Investment Management, Insight Investment and Standard Life Investments, will have a subscription price of 55 pence ($1.09) per share.

Standard Life and Legal & General previously had backed a proposed offer by financier Clive Cowdery's company, Resolution plc. Mr. Cowdery withdrew after B&B refused to opens its books to his team.

B&B shares fell 18 percent to 50 pence (99 cents) in trading on the London Stock Exchange. They had traded above 180 pence in early May.

"Management have bungled here, in our view, and the rights process is now being lengthened meaning likely further stock price falls," said Alex Potter banking analyst at Collins Stewart, who rated the stock as "sell."

Standard & Poor's, which already had B&B under review, said the latest developments were "a further blow for B&B's credibility and financial flexibility".

"Whilst we are disappointed that TPG intends to terminate its subscription agreement, I am pleased that Citi and UBS and our major shareholders continue to support our proposed capital issuance," said Rod Kent, B&B's executive chairman.