China CITIC Bank raised US$5.4 billion by pricing its share sale at the top of an indicated range as investors crowded into the world's biggest initial public offering (IPO) this year, sources close to the deal said on Friday.
The country's seventh-biggest bank sold 4.885 billion Hong Kong shares at HK$5.86 apiece and priced 2.3 billion A shares to be listed in Shanghai at 5.80 yuan each.
Top-of-range pricing had been expected given the huge investor interest in China's banking sector, which is viewed as a proxy for the country's 10-plus percent economic growth as well as rising spending power and consumer borrowing.
The overseas institutional portion was more than 80 times covered, while the Hong Kong retail part of the deal was roughly 230 times subscribed, the sources said, which lifts the retail portion of the Hong Kong deal 20% from 5%.
CITIC Bank was forced to lower its maximum issue price to 2.75 times its 2007 book value from 2.81 times as mainland institutional investors and regulators deemed the valuation too rich.
Spain's Banco Bilbao Vizcaya Argentaria and CITIC International Financial Holding bought roughly US$1 billion of shares in CITIC Bank's IPO.
Japan's Mizuho Corporate Bank, China's National Council for Social Security Fund, PICC Property and Casualty and China Life Insurance each bought HK$400 million (US$51.3 million) worth of CITIC Bank shares.
The deal, arranged by China International Capital, CITIC Securities, Citigroup, HSBC and Lehman Brothers, is the second simultaneous Hong Kong-Shanghai listing after Industrial and Commercial Bank of China's $21.9 billion IPO last year, which was the world's largest.
Shares of CITIC Bank will start trading on April 27.
The Hong Kong share price range had been HK$5.06-HK$5.86, while the range for the Shanghai-listed A shares was 5.00 yuan to 5.80 yuan each.