April 6 (Bloomberg) -- HSBC Holdings Plc, Europe’s biggest bank, said shareholders bought about 97 percent of the stock on sale in its 12.85 billion-pound ($19.1 billion) rights offer.

The London-based lender today sold the remaining 172.7 million shares to investors for 448 pence apiece, it said in a statement today.

HSBC sought the money after its North American unit posted a $15.5 billion pretax loss in 2008. While the bank has set aside about $53 billion to cover bad loans during the past three years, it has avoided taking U.K. government funding, unlike Royal Bank of Scotland Group Plc and Lloyds Banking Group Plc.

“This staves off by a very long way the day when they would have to go cap in hand to the government,” said Alan Beaney, who helps manage about $2 billion at Principal Investment Management in Sevenoaks, southeast England. “The real question is ‘have they raised enough?’”

HSBC gained 3.7 percent to 450.75 pence in London. The bank has declined 22 percent this year, giving a market value of about 78 billion pounds, bigger than RBS, Lloyds and Barclays Plc combined.

The bank sold the shares to investors for 254 pence each in the U.K.’s biggest rights offer. The bank is “well-positioned for the uncertain economic environment and for growth opportunities,” it said in an e-mailed statement yesterday. HSBC will use the money to boost capital and fund acquisitions that fit with its strategy of expansion in emerging markets.

Stronger Capital

The cash infusion lifts HSBC’s Tier 1 capital ratio, a key gauge of a bank’s financial strength, to 9.8 percent from 8.3 percent, within the target range of 7.5 percent to 10 percent.

“The main concern is that we don’t know how much the U.S. operation is going to suck out of capital,” said Simon Willis, a London-based analyst at NCB Stockbrokers Ltd. who has a “sell” rating on the stock. “Its U.S. operation is facing big losses for at least the next two years. This could well be a continuing drain on capital so they may need a fresh injection.”

HSBC said it met with more than 350 institutional investors to promote the sale. In Hong Kong, which accounts for about a third of HSBC’s shareholder base, the sale was taken up by more than 98 percent of investors after local tycoons including Li Ka-shing endorsed the stock. Li, Hong Kong’s richest man, and other billionaires based in the city are underwriting at least $1.1 billion of the offering, which closed on April 3 in London.

“This is hopefully the last cash call on shareholders,” said Amit Rajpal, who manages the Marshall Wace Global Financials Fund in Hong Kong. “You should see the stock stabilize or even probably creep up from here.”

Goldman Sachs Group Inc. and JPMorgan Chase & Co. were lead underwriters for HSBC. BNP Paribas SA, Credit Suisse Group AG, RBS, Citigroup Inc., Societe Generale SA, Intesa Sanpaolo SpA, Nomura and ING Groep NV, also underwrote the offering, according to a note sent to clients and obtained by Bloomberg.

To contact the reporters on this story: Kevin Crowley in London at kcrowley1@bloomberg.net; Andrew Macaskill in London at amacaskill@bloomberg.net

Last Updated: April 6, 2009 11:43 EDT