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Citic Securities $2 billion HK deal 4 times covered
September 27, 2011 / 3:31 AM / in 6 years

Citic Securities $2 billion HK deal 4 times covered

HONG KONG (Reuters) - Citic Securities Co Ltd (600030.SS), China’s largest publicly traded brokerage, has enough commitments from investors to cover its Hong Kong stock offering four times at the bottom of the marketing range, two sources with knowledge of the deal told Reuters on Tuesday.

Recent volatility in global markets has prompted some companies, including Sany Heavy Industry (600031.SS) and rival XCMG Construction Machinery Co Ltd (000425.SZ), to postpone up to $4.5 billion in deals last week. Slumping markets may also pressure other companies to put capital raising plans in Singapore and China on hold.

Citic Securities is offering 995.3 million shares (6030.HK) at an indicative price range of HK$12.84 to HK$15.2 each, putting the total deal size as high as HK$15.13 billion ($1.94 billion), according to terms of the offering.

The price range is equivalent to a discount of 13 percent to Citic Securities’ Shanghai-listed shares and a premium of 3 percent.

Guidance from the China Securities Regulatory Commission (CSRC) puts the maximum discount at 10 percent for share offerings similar to Citic Securities, so investors will have to bump their bids to take part in the deal, according to one source.

The stock has dropped 4.3 percent since Citic Securities unveiled the price guidance, putting the bottom of the range at a discount wider than CSRC’s guidance.

Demand for the offering did not include $850 million in commitments received from cornerstone investors, the sources added.

The company started an investor roadshow for the deal on September 16 and is slated to price the offering on September 28.

Citic Securities is the sole global coordinator of the offering, with a group of banks including BOC International, CCB International, Bank of America Merrill Lynch (BAC.N) and Credit Agricole’s (CAGR.PA) CLSA unit also helping to underwrite the deal.

Writing by Elzio Barreto; Editing by Chris Lewis and Ken Wills

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