HSBC Holdings Plc, Europe’s biggest bank, said investors ordered 97 percent of the shares in its 12.5 billion-pound ($18.5 billion) rights offer.
HSBC sold the shares to existing investors for 254 pence each, 41 percent less than the close on April 3 in London. The sale was the U.K.’s biggest ever rights offer.
“As a result of the rights issue, HSBC is well-positioned for the uncertain economic environment and for growth opportunities,” HSBC said in an e-mailed statement today.
HSBC will use the money to increase capital and finance acquisitions that fit with the company’s strategy of expansion in emerging markets. The bank is closing consumer finance operations in the U.S., the biggest source of the bad loans that forced HSBC to take $53 billion of provisions over three years.
The stock sale lifts London-based HSBC’s tier 1 capital ratio to 9.8 percent from 8.3 percent, HSBC said. The bank targets a range of 7.5 percent to 10 percent.
Goldman Sachs Group Inc. and JPMorgan Chase & Co. were lead underwriters for the share sale. BNP Paribas SA, Credit Suisse Group AG, Royal Bank of Scotland Group Plc, Citigroup Inc., Societe Generale SA, Intesa Sanpaolo SpA, Nomura and ING Groep NV, also underwrote the offering, according to a note sent to clients and obtained by Bloomberg.
Billionaire Li Ka-shing and a group of Hong Kong investors are underwriting at least $1.1 billion of the offering, which closed at 11 a.m. on April 3 in London.
HSBC said it met with more than 350 institutional investors to promote the sale.