The final take-up of HSBC’s fully underwritten rights issue to raise £12.5 billion ($17.7 billion) is due to be announced on April 8. It would be interesting to know what the take-up was like among HSBC’s own employees.
Last month, at the announcement of the deal, chairman Stephen Green explained how cheerfully the bank’s own senior executives were looking forward to subscribing to their entitlements under the five-for-12 deal, the third-largest rights issue ever.
The discount on the rights issue was announced at the outset – a rather macho gesture from HSBC – at a hefty 47.5% to the previous close. Given that and the generous fees on offer to sub-underwriters, would any of the bank’s senior executives care to subscribe beyond their pro-rata entitlement, Euromoney innocently asked one at the following lunch. "Well, I do have a rather large exposure already, as you can see from the published accounts," came the testy reply.
It is, indeed, a very large cash call. Proceeds from the rights issue would, if used to capitalize an entirely new bank, rank it, even without addition of more tier 2 capital, alongside such names as Lloyds Banking Group or Dresdner Bank in the Euromoney bank capital atlas.