Capital One To Offer $1.25 Billion In Common Stock

Capital One Financial Corp. (COF) plans to offer $1.25 billion of its common stock to help fund its acquisition of HSBC Holdings PLC's (HBC, 0005.HK, HSBA.LN) U.S. credit-card operations.

Capital One is buying HSBC's U.S. credit-card business, which includes about $30 billion in loans, for $2.6 billion. The deal would make Capital One one of the largest issuer of private-label credit cards.

The company, which transformed itself from a credit-card lender to a bank just before the financial crisis, has benefited along with many of its peers in recent months as its credit quality improves. A stronger portfolio helped drive Capital One's profits higher earlier in the year, though Capital One's fourth-quarter profit fell a surprisinig 42% as it reported higher provisions for losses on loans.

Capital One completed its acquisition of ING Direct USA from ING Groep NV (ING, INGA.AE) last month in a deal valued at $9 billion.

Shares slid 1% to $51.80 in after-hours trading. The stock is up 24% so far this year.

   -By Nathalie Tadena, Dow Jones Newswires; 212-416-3287; [e-mail]