Fund managers give C&W exchangeable the thumbs down

Equity-linked investors report little appetite for the $1.5 billion transaction, which has continued to cause heavy selling pressure on the underlying stock.

Lead manager UBS Warburg's protestations that a full order book has been secured for the Cable Wireless exchangeable into PCCW have been met with considerable scepticism by the rest of the market, which believes that up to two-thirds of the deal may remain unplaced. 

As one rival banker puts it We all bid aggressively for these deals and there's a very fine balance between winning a deal and still being able to provide something that investors will accept. Sometimes when the balance is tipped a little too far the wrong way, a lead manager can find that everything starts to work against it and then it has a big problem...

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