In the end there was very little damage to the ANZ Bank’s share price from the $2.5 billion issue at $14.40.
And, that tells us a lot about how sentiment has changed in the market and among big investors towards companies raising cash, and banks in particular.
Even though regional banks Suncorp and Bendigo and Adelaide are in the news about potential new or rising bad debts, there seems to be an overall improvement in the way our big banks are being seen.
There was no sign of the ANZ shares falling back to the issue price; instead they opened just above $15 a then edged higher to end down 19 cents at $15.38.
They were $15.57 before the fund raising was announced on Wednesday morning.
The issue’s discount of 7.5% had been cut back to just 1.2% by the end of trading yesterday.
Even more interesting was the reception by the market to the stated intention for some of the money: expansion by bidding for the Asian assets of failed UK bank RBA, which is now controlled by the British Government.
ANZ helped the selling of that move by revealing that around $1 billion of the raising would be tucked away to help bolster capital against an expected rise in second half bad debts.
Mr Smith spoke in Melbourne yesterday, but while he was guarded, he did express confidence that the purchase would add to earnings.
That will help with retail shareholders to be asked for another $380 million or so, but the ANZ won’t be hanging on the last dollar from that issue.
With RBS failing to get bids from possible rivals, HSBC and Standard Chartered for the retail and commercial operations in eight Asian countries, the way is now open for the deal to go forward, unless RBS tries to restart the auction.
HSBC and Standard Chartered missed last week’s deadline to submit offers and have instead asked RBS for more information about the units.
Standard Chartered reportedly is interested in the Indian assets of RBS and may try to get the struggling bank to separate the assets in a new sale process.
Meanwhile shares in healthcare provider Primary Health Care and project manager Ausenco entered trading halts yesterday pending capital raisings.
Primary wants more than $330 million to reduce debt of $1.5 billion, most of which is due next February.
Primary said it will raise approximately $330 million via a fully underwritten institutional placement of ordinary shares at $5.00 per share and it could raise another $96 million from retail shareholders in a separate offer.That was up from the original $265 million sought.
The placement and issue will be made at $5 a share. Primary shares closed at $4.96 on Wednesday, so the offer will be made at a very rare premium to market.
Primary said it has total current debt facilities of $1.54 billion, comprising; $1.44 billion in a syndicated bank debt facility and $100 million in a working capital facility
"These facilities mature on 13 February 2010. As at 31 December 2008, these facilities were drawn to $1.50 billion.
“Proceeds of the Placement and SPP will be used to retire debt.
"At the release of the interim FY2009 result Primary provided guidance of EBITDA in FY2009 of $350 million. Primary reaffirms this guidance."
And engineering, construction and project management group Ausenco asked for its shares to be placed in a halt pending an announcement about a capital raising.
It’s raising at least $40.5 million in a placement to big shareholders, with more (unstated) to be raised in a retail offer to smaller shareholders.
The shares will be issued at $3.20 compared with a closing price on Wednesday for $3.70.
The company said the raising will position it for the future and follows the recent announcements with respect to new contracts at Cadia East and Gosowong.
"Following the Placement, Ausenco’s net gearing based on the 2008 Pro-forma financial statements would decrease from 26.8% to approximately 10.9%," the company said in its statement.
Ausenco Chief Executive Officer Zimi Meka said "As part of the recent wins at Cadia East and Gosowong we have seen the start of a series of contract awards expected within the next few months converting Ausenco’s strong pipeline, in excess of US$20 billion, of study and short listed tender opportunities to project work.
"We are seeing early signs of a return to growth and we would like to be strongly positioned to take advantage of both project and acquisition opportunities. Our pipeline remains strong providing a solid base for growth into 2010.
"Adding further strength to our balance sheet and bonding capacity will ensure that we can respond to these opportunities, as well as strategically accretive acquisitions, as they arise.
"We continue to progress with and win work in the many global regions and sectors that we operate in.
"The market is challenging, but work is still occurring, and signs of confidence are returning. There are plenty of opportunities and we believe we are well placed to continue our strategic growth."
