Banco Comercial Soars on Plans for Rights OfferAnabela Reis
Banco Comercial Portugues SA, Portugal’s second-biggest publicly traded bank by market value, soared after it said it would issue shares to repay state aid earlier than planned.
Shares were up 13.9 percent to 0.1805 euros in Lisbon at 11:38 a.m., after dropping as much as 9.2 percent in trading today. Earlier they were up 15 percent.
“Some investors who sold shares as reports on a possible capital increase started to emerge, may now be returning to participate in the rights offer,” Pedro Oliveira, a trader at brokerage Go Bulling in Lisbon, said by telephone today.
Banco Comercial said after the markets closed in Portugal yesterday that it would sell shares at a subscription price of 0.065 euros. That represents a discount of about 59 percent on yesterday’s closing price of 0.1585 euros.
The lender plans to use the money to repay 1.85 billion euros ($2.5 billion) of state-subscribed hybrid capital instruments. It intends to reimburse the outstanding 750 million euros by 2016, a year ahead of its schedule.
The bank sold 3 billion euros of these securities to the Portuguese state in 2012 as part of the country’s international bailout plan, which earmarked 12 billion euros for recapitalizing lenders. Chief Executive Officer Nuno Amado said in February the bank would like to repay the state as soon as possible. In May it returned 400 million euros.
Deutsche Bank AG and JPMorgan Chase & Co. are joint global coordinators and joint bookrunners. Goldman Sachs Group Inc. and UBS AG are also joint bookrunners of the rights offer.