Equity market rally helps HSBC rights issue
Equity market rally helps HSBC rights issue, A stock market rally over the past 10 days has helped rights issues achieve high take-up rates, boding well for HSBC Holdings’ (HSBA.L)(0005.HK) $18 billion rights issue, the world’s third-largest ever.
HSBC rights had a rocky start when its rights issue trading period began on Friday, but the recent rally should benefit take-up, bankers and fund managers said, predicting that the take-up for the offer should exceed 90 percent. “Most investors will be taking up their rights in the company because the new shares have been priced at such a low level,” said a London-based fund manager.
HSBC rights issue By 1300 GMT HSBC shares were down 6.4 percent at 368 pence, underperforming a 2 percent fall in the DJ Stoxx Europe bank sector as eight days of gains came to a halt, but still well above the 254p rights offer price. HSBC’s nil-paid shares HSBAn.L fell sharply to 114p.
Goldman Sachs (GS.N) and JPMorgan Cazenove (JPM.N) are each underwriting 2.6 billion pounds ($3.79 billion) of the 12.9 billion pound issue, and co-bookrunners BNP Paribas (BNPP.PA), Credit Suisse (CSGN.VX) and RBS Hoare Govett (RBS.L) are underwriting 1.6 billion pounds each. Over 5 billion pounds has been pledged in sub-underwriting, people close to the deal said.
