Issuers Set to Test IPO Market

Two IPOs scheduled for today kick off a string of transactions expected to be the last equity new-issue activity before the traditional August hiatus. Louis Dreyfus Commodities’ Biosev is targeting more than BRL750m ($371m). The Brazilian is offering 41.2m primary shares at BRL16.50-BRL20.50 each, meaning a BRL877m size if done at the midpoint and a 15% greenshoe is used. Raising funds for its expansion plan and to repay debt, Biosev is expected to count on significant participation from its controlling shareholder in the deal. Bradesco and JPMorgan are global coordinators on the sale, and Banco do Brasil, Banco Votorantim, Itau and Santander are bookrunners. Mexico’s Corporacion Inmobiliaria Vesta is also testing the waters, selling 177.2m shares at MXP19.00-MXP21.00, meaning a MXP4.08bn sale at the midpoint and if a 15% greenshoe is used. Vesta plans to use 75% of the proceeds for construction of new projects and the remainder for acquisitions. Credit Suisse and Santander are managing. Thursday brings the largest of the pack, Brazil’s Transmissora Alianca de Energia Eletrica (Taesa), which is also the sale that investors and ECM bankers give the best chance of success. The Cemig-controlled transmission company’s “re-IPO” offers 20m units at BRL60.00-BRL70.00 each. This would indicate a BRL1.50bn sale if priced at the midpoint and a 15% greenshoe is exercised. The proceeds will be used for investments and expansion. Bank of America Merrill Lynch, BTG Pactual, Banco do Brasil, Goldman Sachs and Santander are managing the sale. Finally, Chile’s Inversiones La Construccion (ILC) should emerge Friday morning with pricing on an approximately $500m-equivalent IPO. The investment arm of Camara Chilena de la Construccion is offering 3.7m primary shares and 28.5m secondary shares. ILC is raising funds to capitalize its health care operations and for organic growth and acquisitions. Bank of America Merrill Lynch, IMTrust and JPMorgan are managing the sale, which includes bot