Macquarie (ASX:MQG) share price drops after raising $1.5 billion

The Macquarie Group Ltd. (ASX:MQG) The stock price has come back from its trading stop and is down.

In early trading, shares of the investment bank were down 2.5% at $193.26.

Why was the Macquarie share price halted?

Macquarie’s share price was suspended last week so it could undertake a $1.5 billion institutional placement following its half-yearly update.

Macquarie Group CEO Shemara Wikramanayake explained: “Having deployed $5.5 billion of capital in 2H21 and 1H22, we continue to see a strong pipeline of opportunities. Raising new capital provides us with additional flexibility to invest in new opportunities where the expected risk-adjusted returns are attractive to our shareholders, while maintaining appropriate excess capital.

This morning Macquarie’s share price returned to trade after announcing the successful placement.

According to the release, the placement was made through a bookbuild and will result in the issuance of 7.7 million new fully paid common shares at a price of $194.00 per new share. This represents a discount of just 1.9% to Macquarie’s share price before its discontinuation.

Ms. Wikramanayake commented: “We are very pleased with the success of the Placement and the strong signal of support sent by Australian and international institutional shareholders. Macquarie remains committed to investing in the growth of our business in a disciplined way. »

A stock purchase plan will soon follow, giving shareholders the opportunity to request up to $30,000 worth of stock. This will be offered at the lower of the placement price (adjusted by the interim dividend) or a volume-weighted average price of 2% during the five days preceding the closing date of the purchase plan. of shares.

Half-year results impress

It’s not often that a fundraiser is undertaken at such a small discount to a company’s current share price.

However, Macquarie was able to achieve this after impressing the market with its half-year result.

For the six months ended Sept. 30, the investment bank reported first-half net income of $2,043 million. This was double what it had recorded in the previous corresponding period and in line with the second half of financial year 2021. This enabled Macquarie’s board to declare a partially franked interim dividend of 2, $72 per share.

The result went well with the Citi team. This morning, he raised the shares of the investment bank to a buy rating with a price target of $226.00.

Despite today’s decline, Macquarie’s share price is still up almost 40% in 2021.