Societe Generale raises $8.4B in share offering
The bank says strong demand is a 'vote of confidence' following a trading scandal and subprime losses.
The bank attained its target sum with even more investor interest than it had expected, which may help the bank fend off predators.
The share issue was oversubscribed by 184%, with total subscription orders of $15.65 billion, the bank said in a statement.
The funds will help plug a gap in SocGen's finances after it lost more than $7 billion unwinding what the bank says were unauthorized bets by trader Jerome Kerviel -- and after $3.8 billion in write-downs linked to the U.S. subprime mortgage crisis.
Demand for the bank's shares, especially in a volatile banking market, "is a real success and a vote of confidence from shareholders for Societe Generale, its strategy, its management," said Guillaume Gabaix of Morgan Stanley, which helped manage the sale.
The bank, in addition to boosting its financial standing, plans to use the new capital to expand in Russia, Brazil, India and central and eastern Europe.
"The success seen in this operation will allow Societe Generale to pursue its development" in sectors and regions with growth potential, the bank said in a statement.
SocGen said its tier 1 ratio, a measure of financial strength, was restored to 8%.
While existing shareholders had preferential subscription rights, most of the new shares were bought by new or former shareholders.
New shareholders had to purchase four rights to buy one new share, bringing the theoretical cost of SocGen shares after the capital increase to $108.91.
SocGen's (SCGL.Y) shares have plunged in recent months. They were trading up 1.7% at 65.20 euros ($100) in Paris.
Societe Generale bank has become the subject of takeover rumors since the trading scandal was revealed in January.
Societe Generale's trading and subprime losses led to a fourth-quarter loss. Annual profit was just 947 million euros ($1.45 billion), compared with 5.2 billion euros in 2006.
A French investigation into alleged rogue trading at Societe General is ongoing.
A French court will rule Friday whether trader Kerviel can be freed from Paris' La Sante prison during the probe. Preliminary charges were filed against Kerviel for forgery, breach of trust and unauthorized computer activity.
Societe Generale says Kerviel forged documents and e-mails to suggest he had hedged his positions. 
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