Mega's market migraine?

Echoes of summer 2002 as a convertible for Mega Financial Holdings needs to be priced below par to clear the market.

Joint leads Lehman Brothers, Morgan Stanley and Barits Securities completed a $600 million convertible for Mega Financial Holdings late Wednesday night Asian time after re-pricing the deal to make sure it could withstand secondary market trading.

The decision clearly paid off after the transaction traded up in the secondary market the next day and the deal came good. However, its passage to market provides yet another example of what happens when investment banks get boxed into a corner because of the competitive bidding process for deals, which forces virtually everyone to bait unfeasible terms and then try and switch them.

Where Taiwan is concerned, it is all highly reminiscent of the...

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