HONG KONG, Sept 26 China Merchants Bank
completed the Hong Kong portion of a
rights offer on Thursday with a 96.47 pct acceptance, helping
the country's sixth-largest lender raise a total $5.5 billion to
help meet capital requirements.
Shares in the HK$7.95 billion ($1.03 billion) Hong Kong
portion of the fund raising were offered at HK$11.68 each, a
17.6 percent discount to the closing value the day before the
deal was announced in August.
This was enough to tempt shareholders despite worries about
capital ratios at China's small- to mid-sized banks. Earlier
this month it raised 27.5 billion yuan ($4.49 billion) in the
Shanghai portion of the rights issue that was taken up by 96.4
percent of shareholders.
China's largest banks are well capitalised compared to their
global peers. But the same cannot be said for its small to
mid-sized banks, where a pipeline of stock deals is adding up at
a time of concern about their exposure to the country's slowdown
and the health of their balance sheets.
"Bad debt is always a concern, but it's been priced in for
this event," said Timothy Li, a banking analyst at brokerage
Core Pacific-Yamaichi in Hong Kong. The discount "makes it
meaningful for the shareholders to subscribe because it helps to
lower the overall cost of investment."
China International Capital Corp (CICC), Citigroup,
Goldman Sachs and UBS were hired as joint
global coordinators, with CMB International and CM Securities
also acting as joint bookrunners on the deal.
($1 = 7.7532 Hong Kong dollars)
($1 = 6.1200 Chinese yuan)
(Reporting by Elzio Barreto and Michelle Chen; Editing by
Michael Urquhart and David Evans)