CBL debuts on NZX - shares up at $1.73

Peter Harris, managing director of newly listed financial risk insurer CBL Corporation.Photo / Dean Purcell.

Financial risk insurer CBL Corporation has made its stock market debut this morning, after raising $125 million through New Zealand's second public share offer of the year.

The Auckland-based company's shares were priced at $1.55 in the initial public offering (IPO), and listed on the NZX at 11am this morning. They traded as high as $1.75 following the listing, before settling back to $1.73 just before midday.

The company's shares will also list on Australia's ASX this afternoon.

CBL went ahead with its offer despite increasing volatility in equity markets resulting from fears about China and the global economy, combined with uncertainty about the outlook for US interest rates.

This morning, managing director Peter Harris said the healthy premium to the offer price achieved by CBL shares sent a good signal to investors.

The final pricing of the offer was set through a bookbuild from an indicative range of $1.45 to $1.85.

"We were never looking for the last dollar - we weren't exiting," he said of the offer price.

"It's always good to leave a little bit on the table."

Companies usually prefer to list when market conditions are settled, but Harris said CBL hadn't been phased by the turmoil that has taken place in markets in recent weeks.

"You go through this process and you get a head of steam up - if you're going to list you just need to keep going," he said.

Of the $125 million CBL raised, $90 million is new capital earmarked for growth, including funding the firm's $46 million acquisition of Australian specialty insurer Assetinsure Holdings.

The offer price values the company at $340.5 million.

Existing shareholders, including Harris, are expected to retain a 60 to 63 per cent stake in CBL following the offer.

Harris said the Assetinsure acquisition will take place tomorrow and it would take at least a year to fully integrate that business into CBL.

The two businesses were well-aligned, he said, although some of Assetinsure's product lines - such as property loans and property and casualty insurance - were not "core business" to CBL.

"We'll be looking closely at those [non-core] lines," Harris said, adding that divestments were a possibility.

CBL, whose products include residential builder warranties and construction bonds, derives almost 98 per cent of gross revenue outside New Zealand, mostly in Europe.

With the listing completed, Harris said CBL's focus was now on "meeting or exceeding" the forecasts provided in the IPO documents.

He said Mexico, where CBL recently acquired a 35 per cent stake in Fiducia, a Mexican insurer, was a big focus for the company.

"We've been doing very successful business in Mexico for 12 years," he said. "Through our investment in Fiducia we want to expand our footprint throughout Mexico."

CBL was founded more than 40 years ago, began its international expansion in 2000 and today employs more than 100 staff across eight international offices.

It has forecast net profit to rise from $19.4 million in the 2014 calendar year to $26.1 million in 2015 (excluding the contribution of the Assetinsure acquisition) and $40.4 million in 2016.

Including Assetinsure, a $29.2 million profit is forecast for 2015 from a gross written premium of $335 million.

CBL's IPO is the second to take place in New Zealand this year after transport and logistics firm Fliway Group, which raised $35 million when it listed in April.

There were 12 NZX main board IPOs in 2014.