CDB Leasing Said to Price $799 Million IPO Near Bottom End

China Development Bank Financial Leasing Co. raised $799 million after pricing its Hong Kong initial public offering near the low end of a marketed range, according to people familiar with the matter.

The Shenzhen-based lessor sold 3.1 billion shares at HK$2 apiece, the people said, asking not to be identified as the information is private. The shares were offered at HK$1.90 to HK$2.45 each, the deal prospectus shows.

CDB Leasing, an arm of China’s biggest policy lender, leaned on state-owned enterprises to complete its offering during one of the most tumultuous times for investors in years. U.K. voters’ unprecedented decision last week to leave the European Union sent shockwaves across global equity markets and caused the pound to plummet to its lowest in more than three decades.

“The volatile environment created by Brexit, as well as an increasing reliance on Chinese SOEs as cornerstone investors, mean that IPOs need to be priced conservatively,” Philippe Espinasse, the former head of Asia equity capital markets at Nomura Holdings Inc. and author of “IPO: A Global Guide,” said by e-mail Thursday. “This is especially true for new listings from the financial sector.”

Government Backing

A Hong Kong-based spokeswoman for CDB Leasing declined to comment. IFR reported the pricing earlier Thursday in Hong Kong, citing unidentified people.

State-owned power generator China Three Gorges Corp. agreed to purchase about 42 percent of CDB Leasing’s IPO shares as a cornerstone investor, committing to hold its stock for six months in exchange for early, guaranteed allocation. The investment sets a record for the highest proportion allocated to a single cornerstone buyer in any major listing in the city, data compiled by Bloomberg show.

The pace of listings in Hong Kong has already slowed this year, with $6.8 billion of first-time share sales priced before CDB Leasing, according to data compiled by Bloomberg. Such offerings raised $17.4 billion during the same period last year, the data show.

Orient Securities Co. and its existing investors raised $1 billion after pricing a Hong Kong first-time share sale this week below the mid-point of a marketed range, people familiar with the matter said earlier. The Shanghai-based brokerage priced the sale of 957 million shares at HK$8.15 each, after offering them at HK$7.85 to HK$9.35 apiece, according to the people.

Bank of America Corp., Citic CLSA Capital Markets Ltd., Deutsche Bank AG, HSBC Holdings Plc and UBS Group AG were joint global coordinators of the CDB Leasing offering. The company aims to start trading July 11, its prospectus shows.

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