UniCredit (UNCFF) traded lower Friday after it said investors have taken up the bulk of its record capital raising following a statement from the bank late yesterday in Milan.
Italy's largest lender received commitments to take up 99.8% of the rights issue, which will raise €12.9 billion, enabling it to repair a restructuring-related hole that opened up in its capital buffer in January. Any unsubscribed rights will be sold to investors beginning Feb. 27.
The offering, which was fully underwritten and had a March 10 deadline, gave investors a chance to purchase stock at a 38% discount to the ex-rights price, or about €8.08.
UniCredit stock fell 2% in Milan to change hands at €12.19 each by 10:40 GMT, giving the bank a market value of $27.1 billion.
UniCredit had been racing against the clock to get the deal done in order to plug a hole in its balance sheet that pushed its capital buffer below European Central Bank requirements. The capital gap had endangered UniCredit's ability to make both interest payments to some bondholders and dividend payments.
The bank had detailed a mammoth plan to strengthen its balance sheet in December, as Monte dei Paschi (BMDPY) teetered on the edge of the abyss, and address a pile of nonperforming loans that has been encroaching on its capital buffer.
Given Monte dei Paschi's subsequent failure to raise enough capital to repair its own balance sheet, in an effort led by JPMorgan Chase (JPM) , the fact that international lenders were willing to underwrite the offer for UniCredit may have been a factor in the speed with which investors subscribed to take up the discounted shares.
