Guatemala-based Banco Industrial is preparing to IPO as part of a growth strategy that includes establishing operations in Panama and Costa Rica, Luis Prado, the bank’s international division manager tells LatinFinance. An IPO is not an “immediate” likelihood, but an option for the medium term, says Prado. “It’s matter of finding the right timing, because these are deals that transform an institution,” he says. Opening the bank to fresh capital through an IPO would be particularly important if it pushes ahead with growth and acquisitions in Central America. “The growth opportunities are there today, and if we don’t take advantage of them then other banks certainly will,” he says. Banco Industrial hopes also to expand its operations in El Salvador and Honduras organically and potentially through acquisitions, and to enter the Costa Rican and Panamanian markets.
Category: Equity
Arauco to Raise Equity
Parque Arauco plans to raise CLP115bn ($230m) in equity capital, it says. Shareholders are to approve the matter October 23. It was unclear what the issuer plans to do with the proceeds, and officials at the mall operator were not available for comment.
Santander Brasil Preps for Basel III with Hybrid Plans
Santander Brasil plans to swap BRL6bn ($2.67bn) of equity for hybrid capital and subordinated debt, reducing its cost of capital as Basel III rules come into effect in Brazil. The bank will pay a BRL6bn dividend, it says, and offer shareholders an equivalent amount in a hybrid instrument that complies with Basel III rules for additional tier 1 capital (AT1), and a tier 2 bond. The AT1 note will be a perpetual NC5 instrument that will convert into equity if the bank’s capital ratio falls below a pre-defined trigger or the bank becomes non-viable. Coupons are likely to be 9%-10%, and Santander will have full discretion over the coupon payments, which will not accumulate if they are not made. The 10NC5 tier 2 bond will also carry equity conversion risk, flipping if the regulator deems the bank non-viable or if the bank’s common equity capital breaches 4.5% of risk-weighted assets. That trigger makes the bond similar to contingent capital (Coco) instruments. “It will be interesting to see how the investor base looks at it, whether it’s a true Coco-type instrument, or whether the trigger is so low that it’s part of non-viability loss absorption anyway,” Stanley Louie, head of the new products group at Citi, tells LatinFinance. The tier 2 is likely to pay 7.5% to 9.0%, Santander estimates. The new instruments offer another glimpse at Basel III-compliant structures in Brazil though, given the bank’s ownership, the AT1 note offers tougher terms to investors than it would otherwise, to comply with European rules. The non-equity capital will be offered only to existing shareholders, in proportion to their ownership. Parent company Santander Group has agreed to participate and to buy any capital that is not subscribed by others. The bank estimates the operation will increase ROE by 40bp. The bank hopes to execute the capital optimization plan, which is subject to shareholder and regulatory approval, in the next 4-5 months. Santander Brasil has a common equity tier 1 capital ra
Fibra IPO Begins Taking Orders
Mexican developer Grupo Danhos is moving ahead with its Fibra real estate fund plans, targeting more MXP6bn ($460m) in an October 8 pricing. The developer plans to sell 200m shares at MXP26.00-MXP28.00 each, according to offering documents, meaning a MXP6.21bn sale at the midpoint if a 15% greenshoe is included. The transaction includes both Mexican and international tranches. The fund begins with four shopping centers, four office buildings and three mixed-use properties, all in Mexico City, and is raising money to expand them and to add to the portfolio. The developer is betting that Fibra Danhos’ combination of office and commercial properties focusing on “premier” tenants – its list includes OHL, Cinepolis, Liverpool, the IDB, Sanluis, Grupo Sura, Cisco and Alsea – will distinguish it enough from the existing Fibras to attract investors who might be getting satiated with the growing asset class. BBVA and Goldman Sachs are global coordinators on the transaction, with Evercore as structurer and domestic bookrunner and Banorte-Ixe and Inbursa as co-managers.
Banco de Bogota Plans Share Sale
Banco de Bogota is planning an equity sale of $500m before the end of the year, it says. Proceeds would support the acquisition of BBVA Panama, agreed by parent Grupo Aval in July and done through Banco de Bogota. The transaction remains to be approved by bank’s board. Continuing its Central American expansion, Aval agreed to pay $646m for BBVA Panama. Aval also made initial filings earlier this year for an equity follow-on representing the debut of its US ADS shares, which could raise as much as $1bn, and has hired JPMorgan and Goldman Sachs.
Bancolombia Looks at 2014 Fundraising
Bancolombia is considering tapping capital markets in 2014, CEO Carlos Raul Yepes tells LatinFinance. “Grupo Bancolombia does not plan to issue shares this year. Nor is a bond sale planned this year. We do think that in the future, particularly next year, we might think about issuing capital. But not in 2013,” Yepes says. The bank agreed to buy HSBC’s assets in Panama for $2.1bn earlier this year. Bancolombia’s last bond deal was a $1.2bn 2022 sold in September 2012, which followed a $900m equity follow-on earlier last year.
Tupy Sets FO Target
Brazilian Iron parts maker Tupy has launched an equity follow-on targeting more than BRL600m ($270m) at an October 16 pricing, in what will in many ways serve as a “re-IPO” for the issuer. Tupy is selling 26m primary shares, and BNDESPar 5.2m secondary shares, according to an offering document, meaning a BRL685m deal based on Wednesday’s BRL19.10 closing price if a 15% greenshoe is included. Shares were at BRL19.45 when the deal was re-filed in August. ECM bankers note that the shares are in relatively few hands and do not trade frequently – one of the problems that the follow-on sale looks to correct. Tupy is looking for funds to invest in expansion and in projects that will help lower its costs. Banco do Brasil, Brasil Plural, BTG Pactual, Citi and Itau are managing the sale, with Brasil Plural added since a first attempt at a deal earlier this year. The auto parts specialist operates in Brazil and Mexico, and booked BRL337m in Ebitda in 2012. Elsewhere in the Brazilian pipeline, vehicle services company Sascar is expected to launch as soon as this week, perhaps followed by peer Unidas and education companies Grupo Ser and Anima Educacao.
Adecoagro Holders Prepare Additional Selldown
Adecoagro shareholders are planning to sell as much as 55.8m shares in the farm operator, according to regulatory documents, an amount worth $417m at Tuesday’s $7.47 closing price. The George Soros-backed grower and renewable energy producer operating in Brazil, Argentina and Uruguay filed a shelf for periodic secondary share sales. No timeline was disclosed, and no bookrunners listed. The sellers include “principal shareholders” who were among the original members of International Farmland Holdings, a company acquired by Adecoagro prior to its $314m IPO in 2011. HBK Capital Management raised $112m earlier this year when exiting Adecoagro via a block trade.
Hotel Operator Launches IPO
Grupo Hotelero Santa Fe has launched its IPO, targeting MXP4.03bn ($311m) and pricing October 8, according to regulatory documents. The hotel operator plans to sell 201m shares, if a 15% greenshoe is included, at MXP18.00-MXP22.00 each, meaning a MXP4.03bn size at the midpoint. The issuer expects 84% of the deal to consist of primary shares, and the remainder to be secondary shares sold by investors Nexxus Capital and Walton Street Capital. Santa Fe is raising funds to repay debt and for expansion. It expects a 49% free-float following the transaction, not counting the greenshoe, with 37.5% held by developer Grupo Chartwell, 8.3% by Nexxus and 5.3% by Walton Street. Barclays and JPMorgan are managing the international portion of the transaction, and BBVA and Santander the Mexican portion. Santa Fe operates 10 hotels in 5 Mexican states, including a mix of city and beach resort properties, under brands including Hilton, Hampton Inn, Hyatt and Krystal. The issuer reported MXP1.05bn ($80m) revenue last year. It would follow City Hoteles and the Fibra Inn and Fibra Hotel trusts in going public in the past year.
Vapores Ties Up FO
Chile’s Sudamericana de Vapores (CSAV) has raised CLP34.28bn ($69m) during the public portion of its equity sale, according to the Santiago Bolsa, bringing the total to the target $330m. In the rights offering portion Monday, the shipping and port operation company had raised $261m, including $171m from Luksic family holding vehicle Quinenco. The 1.41bn shares were sold at the same $0.05 price Tuesday. Vapores plans to use proceeds to fund the acquisition of new cargo vessels and to prepay a JPY24bn ($243m) loan from American Family Life Assurance Company. BTG Pactual and Santander managed the transaction.