Barrick Gold Corp.'s huge $3-billion (U.S.) stock sale is a slow seller, market sources said.
The banks leading the deal were still pushing just before markets opened for Friday's session to move the stock. When trading opened in Toronto and New York, the stock slumped below the issue price. That is often a sign of weak demand, and makes it hard for the banks to sell stock as investors can buy more cheaply in the market.
There is no financial risk to Barrick, but there can be to underwriters if they can't move all the stock and have to cut the prices to sell any leftovers. The banks did the transaction as a "bought deal," wherein they purchased the stock from Barrick and now must resell it.
The biggest participants in the syndicate are Royal Bank of Canada, Barclays and GMP Securities, which have 22 per cent each. That means they are each responsible for selling about $700-million of stock.