Promises, promises.
Underwriters of recent rights offerings by U.K. banks HBOS plc, Barclays plc and Bradford & Bingley plc are sweating over their client's capital increases after falls in the banks' value in recent days left shares trading below their rights offering prices. Paper losses for the underwriters could run into the tens of millions.
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Meanwhile, across the Channel, investors cheered French bank Natixis SA's
plans to raise €3.7 billion ($5.9 billion), bidding up the stock almost
10% on Thursday, its biggest gain in more than two months. Natixis has
yet to announce details of its sale, which will be underwritten by its
controlling shareholders, Caisses d'Epargne and Banque Populaires. With
no independent investment bank to foot the bill of a disappointing sale
and with the Natixis' board answerable directly to its underwriters,
analysts expect the French bank to conservatively price its offering.
Underpromise and hope to overdeliver.
- Paul Whitfield
