Hedge funds get 41% of CGD’s issuance

  • ECO News
  • 27 March 2017

Most of CGD's subordinated debt issuance ended up in the hands of foreign investors; hedge funds got 41% of the issuance, the public bank confirmed in a press release sent to the CMVM.

Caixa Geral de Depósitos (CGD) went to the market to raise 500 million euros through subordinated debt securities, and hedge funds ended up holding a large portion of the issuance. According to the press release CGD sent this Thursday to CMVM, 41% of the 500 million were acquired by hedge funds, while asset managers obtained the largest portion: 49%. Portuguese investors held a small part of the overall amount — 14% — while the majority of the issuance went to UK investors (59%).

In the press release sent to the CMVM, CGD confirms the issuance in the securities’ market, “which represents Additional Tier 1 capital worth 500 million euros, made with 160 institutional investors“, adding the “final amount allocated to institutional investors in this issuance was distributed between asset managers (49%), hedge funds (41%) and insurance companies (5%), with a diversified geographical origin; special highlight goes to the United Kingdom (59%), Portugal (14%), Switzerland (8%), Spain (6%) and France (5%)“.

In the press release, the public bank confirms the high demand, which reached 2,000 million euros — “four times higher than the amount of the issue”, states CGD.

As for the rate, it ended up being 10.75%, as Bloomberg had anticipated, “clearly below the initial price (between 11% and 11.5%)”. This transaction allows for the conclusion of the second stage of CGD‘s Recapitalization Plan, worth 3,000 million euros, by the end of March.

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