REFILE-UPDATE 3-China’s CCB launches $9.2 bln rights issue

(Refiles to add China to headline)

* CCB subscription price at HK$4.38 or 3.77 yuan

* Rights issue smaller than previously announced plan

* CCB pricing comes 2 days after BOC, also at steep
discount

* Good prospects for offer after strong earnings- analysts

* CCB shares up 1.31 pct in HK, highest since Dec. 2007

(Adds details, background on BOC rights issue)

By Daisy Ku and Samuel Shen

HONG KONG/SHANGHAI, Nov 2 (BestGrowthStock) – China Construction
Bank Ltd (CCB) (0939.HK: ) plans to raise up to 61.6 billion yuan
($9.2 billion) in Asia’s biggest rights issue outside Japan, as
China’s No. 2 lender aims to shore up capital after a lending
binge in 2009.

The rights offer in Hong Kong and Shanghai follows Bank of
China’s (3988.HK: ) announcement for a $9 billion rights offer
and caps a rich year for capital raising by Chinese banks,
which includes Agricultural Bank of China’s (1288.HK: ) record
beating $22.1 billion IPO.

Still, CCB is raising about 18 percent less than the 75
billion yuan it initially sought. Strong gains in banking
shares and bumper quarterly profits have eased funding
pressure.

“I think CCB is cutting the size of fundraising to sweeten
itself to investors who are now finding banking shares
attractive,” said Huatai Securities Co analyst Liu Xiaochang.

“This should be a well-thought out move that balances CCB’s
own capital needs and long-term return for investors.”

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Graphic on Chinese banks’ fundraisings:

http://link.reuters.com/tug43q

Graphic on comparison of top China banks:

http://link.reuters.com/mar42q

PDF on a Basel III: http://r.reuters.com/zys68p

CCB’s third-quarter results: [ID:nTOE69Q045]
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

CCB’s Hong Kong shares extended their winning run and were
1.3 percent higher at HK$7.74 at 0605 GMT in a flat market
(.HSI: ), having hit their highest level since December 2007.

China’s banks are raising funds to meet tougher regulatory
requirements and CCB’s rights offer is the biggest in the
Asia-Pacific region, excluding Japan.

Industrial and Commercial Bank of China (ICBC) (1398.HK: )
(601398.SS: ), the world’s biggest lender by market value, is now
the only one of China’s “Big Four” state lenders yet to detail
pricing plans for its rights issue.

Banks including Bank of Communications (3328.HK: )
(601328.SS: ) and China Merchants Bank (600036.SS: ) (3968.HK: ) have
raised $10.5 billion so far this year through rights issues,
according to Thomson Reuters data, to replenish capital
depleted by last year’s record lending to support the economy.

BRIGHT PROSPECTS

CCB is offering 0.7 shares for every 10 existing shares at
3.77 yuan per A-share and HK$4.38 per H-share. The Shanghai and
Hong Kong issue prices are the same after currency conversion.

The rights issue, first proposed in April, comes at a 43
percent discount to CCB’s Hong Kong closing price of HK$7.64 on
Monday, and is 27 percent lower than its A-share closing price
of 5.16 yuan.

Bank of America (BAC.N: ), which owns a 10.95 percent stake
in CCB, declined to comment on whether the U.S. bank would
participate in the CCB rights offer. But other shareholders
were broadly supportive of the rights offer.

“CCB shouldn’t have any problems closing the deal after
record quarterly earnings,” said Alex Wong, a fund manager at
Ample Capital. Wong said he planned to subscribe to CCB’s
rights because of the deep discount.

CCB’s state parent Central Huijin, a unit of China’s
sovereign wealth fund, has said it would fully participate in
the rights issue.

“The fact that Huijin and other institutional shareholders
will likely absorb most of the newly-issued shares means big
banks’ fundraising won’t have much pressure on the secondary
market,” said Jin Lin, analyst at Orient Securities Co.

“We’re near the end of this round of the capital-raising
rush, the impact of which has long been priced in.”

Bank of China (3988.HK: ) (601398.SS: ) on Friday meanwhile
outlined the details of its rights issue.

Bank of China will sell one share for every 10 existing
shares and will start taking subscriptions on Wednesday.

CCB has hired CCB International, China International
Capital Corp., Morgan Stanley (MS.N: ) (Read more about the money market today. ) as joint global
coordinators.

Other underwriters include CITIC Securities (600030.SS: ),
Merrill Lynch Far East, Credit Suisse (CSGN.VX: ) and BOCI Asia.
($1=6.689 Yuan)
(Additional reporting by Donny Kwok; Editing by Dhara
Ranasinghe and Denny Thomas)

REFILE-UPDATE 3-China’s CCB launches $9.2 bln rights issue