HSBC investors buy 97% in rights sale

LONDON: HSBC Holdings, Europe���s biggest bank, said investors ordered 97% 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% less than the close on April 3 in London. The sale was the UK���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 on Sunday.

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 US, 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% from 8.3%, HSBC said. The bank targets a range of 7.5% to 10%. Goldman Sachs Group and JPMorgan Chase were lead underwriters for the share sale. BNP Paribas, Credit Suisse Group, Royal Bank of Scotland Group, Citigroup, Societe Generale, Intesa Sanpaolo, Nomura and ING Groep, 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 on April 3 in London.

HSBC said it met with more than 350 institutional investors to promote the sale.