sjm-not-fully-covered-deutsche-picks-up-the-balance

SJM not fully covered; Deutsche picks up the balance

Thousands of investors cancel their earlier orders in light of a legal challenge, leaving Deutsche Bank as the underwriter to cover the shortfall. But the bank hedges its position by passing on the exposure.

By Anette Jönsson

July 15, 2008

Deutsche Bank has been forced to buy a portion of Sociedade de Jogos de MacauÆs SJM $494 million initial public offering to ensure the listing would go ahead after thousands of investors accepted an offer by the company to withdraw their orders, leaving the previously fully-covered deal undersubscribed.

This unusual outcome confirms that many investors are still not entirely comfortable with MacauÆs largest casino operator û especially at a time when other casino plays are taking a beating and the broader stockmarket remains highly volatile û and suggests that SJMÆs trading debut today could be a real challenge.

Deutsche Bank, which was obliged to buy the SJM shares due to its role as sole...

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