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.

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...

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