Haitong launches $1.7b HK offering

Haitong Securities Co's $1.7 billion Hong Kong share offering took center stage in Asia Pacific equity capital markets Friday, but it also highlighted the risks from deals partly financed by underwriters as competition among banks grows for new listings, Thomson Reuters publication IFR reported over the weekend.

Haitong, China's second-biggest brokerage by assets, received pledges from 11 cornerstone investors for about one-third of the stock on offer. Banks financed a portion of cornerstone orders totaling $330 million.

Pan-Asia private equity firm PAG and US asset manager DE Shaw & Co made the biggest commitments. Other investors included Japan's SBI Holdings, Taiwan brokerage KGI Securities, Dah Sing Bank and The Oman Fund.

The deal also got about $500 million in pledges from anchor investors, one source said Wednesday.

PAG agreed to buy $300 million worth of Haitong shares, funding half of the amount through a mid-term loan arranged by ICBC International Securities, according to the offering's prospectus.