Because we can

13 Oct 2010 By John Foley Follow @johnsfoley

The emerging market lender is wisely cashing in on exuberant emerging markets with a $5.2 billion rights issue. That will come in handy if UK regulators demand that banks hold an extra capital buffer. StanChart should use what s left to beef up in areas where it remains behind.

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Standard Chartered announced on Oct. 13 it planned to raise 3.3 billion pounds ($5.2 billion), net of expenses, in an equity rights issue, to meet tougher rules on bank capital and enable it to expand in Asia, Africa and the Middle East.

The issue is expected to increase StanChart's core Tier 1 capital ratio by 2 percentage points. The ratio was 9 percent at the end of June.

The shares will be issued 1,280 pence per share, a 33 percent discount to the previous day's closing price and a 30 percent discount to the theoretical exrights price.

Temasek, the Singaporean sovereign wealth fund that owns 18 percent of the lender's shares, will follow its rights, StanChart said in a statement.

At 0800 GMT, Stanchart shares were down 3 percent at 1,856 pence.

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The issue is expected to increase StanChart's core Tier 1 capital ratio by 2 percentage points. The ratio was 9 percent at the end of June.

The shares will be issued 1,280 pence per share, a 33 percent discount to the previous day's closing price and a 30 percent discount to the theoretical exrights price.

Temasek, the Singaporean sovereign wealth fund that owns 18 percent of the lender's shares, will follow its rights, StanChart said in a statement.

At 0800 GMT, Stanchart shares were down 3 percent at 1,856 pence.

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