Related News
BofA sells US$7.3b worth of CCB shares for capital needs
By Michael Flaherty |
May 13, 2009, Wednesday
|
Print Edition
Print Edition
BANK of America sold US$7.3 billion worth of shares in China Construction Bank yesterday, according to a source, just days after a United States government "stress test" found the struggling US bank needed to find US$34 billion worth of capital.
BofA unloaded the entire lot of 13.5 billion CCB shares it was allowed to sell, the source said, at HK$4.20 each, or a 14.3-percent discount to their Monday close.
The group of buyers included a unit of China Life Insurance Co, Singapore state investment group Temasek Holdings and China's Hopu Investment Management Co, the source said. The source was directly involved in the deal but was not authorized to speak officially.
The sale cut BofA's stake in the world's second-largest bank by market value to about 10.6 percent.
A lock-up period on the block of shares sold expired last Thursday, and since then equity capital markets bankers had hit the phones to line up investors, hoping to get a mandate and a fee from finding buyers.
But the sale did not involve any of the major investment banks that worked on similar stock sales, with the source saying the block of shares was a "principle-to-principle" negotiated deal.
A US$1.2-billion block of shares briefly placed in the market by an unnamed CCB shareholder early yesterday was part of BofA's share sale, said the source. The bookrunner of that placement was brokerage BOCI, according to a term sheet obtained by Reuters.
CCB's Hong Kong-listed shares closed up 1.6 percent at HK$4.96 yesterday after falling on Monday.
"Since the placement has been expected, I would see a slightly positive impact from the share sale as the overhang was removed," said Michael Tam, an analyst at South China Research. "Buyers like China Life and Temasek are likely to hold the shares as longer term investments, especially as they bought the shares at a very attractive price below the stock's fair value."
BofA had been expected to sell shares in CCB since the US government ordered it to find new capital following its "stress test" of 19 large American banks.
BofA unloaded the entire lot of 13.5 billion CCB shares it was allowed to sell, the source said, at HK$4.20 each, or a 14.3-percent discount to their Monday close.
The group of buyers included a unit of China Life Insurance Co, Singapore state investment group Temasek Holdings and China's Hopu Investment Management Co, the source said. The source was directly involved in the deal but was not authorized to speak officially.
The sale cut BofA's stake in the world's second-largest bank by market value to about 10.6 percent.
A lock-up period on the block of shares sold expired last Thursday, and since then equity capital markets bankers had hit the phones to line up investors, hoping to get a mandate and a fee from finding buyers.
But the sale did not involve any of the major investment banks that worked on similar stock sales, with the source saying the block of shares was a "principle-to-principle" negotiated deal.
A US$1.2-billion block of shares briefly placed in the market by an unnamed CCB shareholder early yesterday was part of BofA's share sale, said the source. The bookrunner of that placement was brokerage BOCI, according to a term sheet obtained by Reuters.
CCB's Hong Kong-listed shares closed up 1.6 percent at HK$4.96 yesterday after falling on Monday.
"Since the placement has been expected, I would see a slightly positive impact from the share sale as the overhang was removed," said Michael Tam, an analyst at South China Research. "Buyers like China Life and Temasek are likely to hold the shares as longer term investments, especially as they bought the shares at a very attractive price below the stock's fair value."
BofA had been expected to sell shares in CCB since the US government ordered it to find new capital following its "stress test" of 19 large American banks.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
