Underwriters of Agricultural Bank of China Ltd.

s Hong Kong initial public offering are tapping a smaller pool of fees than the prospectus would otherwise indicate, and the unusually large group seven in all means that each is getting a smaller piece of the pie. But it still stands to be a big payday, with some investment banks standing to gain more than others, and with Goldman Sachs Group Inc. leading the way. According to a person familiar with the situation, Goldman Sachs and China International Capital Corp. will each collect 17% of the fee pool set aside by AgBank for the underwriters. Based on the prospectus, that pool should stand at 1.98% of the total proceeds from the Hong Kong IPO, which raised $10.44 billion, but given AgBank isnt paying out fees on funds raised by cornerstone investors it brought in by itself, the actual payout is more like 1.35% of the total, the person said. That translates into a pool of about $140.9 million, or $23.96 million each for Goldman Sachs and CICC. Goldman is also the stabilizing manager for the deal, giving it further opportunities to benefit from brokerage fees if it finds itself needing to prop up AgBanks share price during the first 30 days of the stock trading. Morgan Stanley, which was joint global coordinator of the IPO together with Goldman and CICC, will get 15%, and J.P. Morgan Chase & Co., Deutsche Bank AG and Macquarie Group Ltd. each stand to take home 13% of the pool, the person said. AgBanks own investment banking unit, ABC International Holdings Ltd. which was also nominally one of the global coordinators will get 12%. The fees, while handsome, are not breaking any records. When China Construction Bank Corp. listed in Hong Kong in 2005, the underwriters shared $230.7 million in fees, according to Thomson Reuters, despite raising $9.2 billion, significantly less than AgBank. But as the first of Chinas major banks to list, the underwriters and other advisers spent about a year and a half putting the CCB deal together, establishing a template for the next ones. Still, it hasnt been a cakewalk for the underwriters on the AgBank deal, who have been forced to turn around one of the biggest IPOs in history in a bit over three months. Underwriters for Industrial & Commercial Bank of China Ltd. had more than six months to prepare before raising $21.9 billion for that bank in what is still the worlds biggest IPO.

AgBank so far has raised $19.23 billion in its dual listing in Hong Kong and Shanghai, but may raise as much as $22.1 billion if demand for shares justifies an overallotment being exercised. The bank also kept the underwriters on their toes by not formally saying which banks would be anointed global coordinators until well into the IPO process. Another person familiar with the situation said AgBank initially told the investment banks to decide among themselves how the fees would be distributed before later deciding on an appropriate allocation itself.