Investor appetite of 3.5x the shares on offer led to Banorte upsizing its equity follow-on to raise MXP31.98bn ($2.55bn), and continued in the secondary market Wednesday. International buyers accounted for 63% of the sale, according to the bank, versus a 50%-50% split foreseen earlier in the process. The bank upsized the deal from 402m to 477m primary shares, assuming a 15% greenshoe is exercised, stetting a MXP71.50 per share price Tuesday night that represented a 0.1% discount from the previous closing price. The increase in shares put the transaction closer to the initial $3bn target. That goal was reduced as Banorte’s share price fell 11.5% since the deal’s June 12 official announcement. The shares were up more than 10% in Wednesday’s session, however, closing at MXP79.73. The demand for the deal encourages ECM issuers that deals can get done even amid periods of volatility. “The Banorte deal shows a resilience in the market,” says a senior ECM banker away from the deal, noting it will help others in the pipeline. Proceeds are marked to help fund the $857.5m purchase of minority stakes in Seguros Banorte Generali and Pensiones Banorte Generali from Italy’s Assicurazioni Generali, repay a loan and buy out the IFC’s remaining shareholding. The shares in the follow-on represent 14.75% of the bank post-sale. Bank of America Merrill Lynch and Morgan Stanley were global coordinators on the deal and Banorte-Ixe the local coordinator. Banamex, BBVA Bancomer, BNP Paribas, BTG Pactual, Goldman Sachs, Itau, JPMorgan, Mistubishi-UFJ and Nomura were joint bookrunners. The deal was Mexico’s largest equity sale since Santander Mexico’s $4.1bn IPO in September 2012, and the largest all-primary follow-on in the country’s history and the second-largest behind a $2.8bn offering from Telmex in 2000, according to Dealogic data. Next up in Mexico’s ECM is the IPO for Fibra Shop. The shopping center-focused real estate fund is targeting MXP5.77bn at its midpoint and scheduled to price
Category: Equity
Terranum FO on Target
Colombia’s Terranum Inversion has sold COP172.66bn ($92m) worth of shares in its Patrimonio Autonomo Estrategias Inmobiliarias real estate fund during the first two days of the sale period, according to regulatory documents. The fund sold 22.02m shares, or 96% of those on offer, to existing holders, with the remainder available to the broader public through Friday. The shares are offered at COP7,840 each. The fund, considered to be the only asset of its kind in Colombia, acquires and manages operating commercial property throughout the country. Proceeds from this week’s sale will be used to acquire additional properties. Corredores Asociados is managing.
CPFL Renewables IPO Prices at Bottom of Range
Brazil’s CPFL Energias Renovaveis has priced a BRL1.04bn ($446m) IPO, at the bottom of the range. The renewable energy arm of utility CPFL is selling 39m primary shares and 44m secondary shares at BRL12.51 each, according to the CVM, versus a BRL12.51-BRL15.01 range. The share total includes a 15% greenshoe. The deal was the latest Brazilian IPO to rely on special support, in this case boosted by a guarantee from lead manager BTG Pactual to buy 56% of the shares, and a pledge from pension fund Previ to buy around BRL400m worth of shares. Cash from the primary portion of the IPO will go to existing developments and new projects. Selling shareholders in the secondary offering include investor Roberto Sahade and funds linked to Patria Investimentos and Bradesco. Parent company CPFL Geracao is expected to cut its holding in the unit to 57.6%, from 63.0%. Bank of America Merrill Lynch, BTG Pactual and Itau were global coordinators, with Banco do Brasil, Bradesco and Morgan Stanley as bookrunners. Formed through the 2011 merger of CPFL Energia and ERSA, CPFL Renovaveis operates hydroelectric, wind, solar and other types of renewable power generation in Brazil, with 5,553 megawatts installed capacity. The deal was the last actively marketed Brazilian equity transaction in the pipeline. Other Brazilian issuers awaiting launch, such as airline Azul and fleet outsourcing specialist Ouro Verde, will be encouraged by CPFL Renovaveis getting done. However, three of the last four Brazilian IPOs have needed some kind of support, with Biosev offering a put option and Smiles relying on a pledge to buy shares by General Atlantic.
Banorte Clinches Follow-on
Mexico’s Banorte has set a price for an equity follow-on that should raise at least $2.2bn, coming at a 0.1% discount and heard getting multiple times demand. The bank priced at MXP71.50 per share, according to people following the sale, indicating a MXP28.78bn ($2.28bn) size based on a 350m share base deal and 15% greenshoe. The level compares to Tuesday’s MXP72.21 closing price. The shares had dropped 13.0% this year through Tuesday and 11.5% since the deal’s June 12 official announcement, whittling away the deal’s original $3bn target. Investor concerns have included the weight of Banorte’s recent acquisitions, as well as analyst expectations for a more challenging environment ahead. Nevertheless, the bank gets capital to boost its ratios, and the Mexican market gets encouragement that it can withstand global volatility as it heads to a record year for new issuance. Proceeds are marked to help fund the $857.5m purchase of minority stakes in Seguros Banorte Generali and Pensiones Banorte Generali from Italy’s Assicurazioni Generali, and buy out the IFC’s remaining shareholding. Heading into pricing, the bank expected to place 50% of the shares in Mexico and 50% internationally. The shares in the follow-on should represent 14.75% of the bank post-sale. Bank of America Merrill Lynch and Morgan Stanley were global coordinators on the deal and Banorte-Ixe the local coordinator. Banamex, BBVA Bancomer, BNP Paribas, BTG Pactual, Goldman Sachs, Itau, JPMorgan, Mistubishi-UFJ and Nomura were joint bookrunners. The deal is Mexico’s largest equity sale since Santander Mexico’s $4.1bn IPO in September 2012.
CPFL Set for IPO
Brazil’s CPFL Energias Renovaveis is scheduled to price an IPO today, targeting more than BRL900m ($400m). The renewable energy arm of utility CPFL is offering 28m primary shares and 44m secondary shares at BRL12.51-BRL15.01, meaning a BRL1.14bn transaction at the midpoint if a 15% greenshoe is included. Books were heard to be more than half covered on Tuesday. The issuer first tried to price an IPO last year, with market conditions getting in the way. This time, though, the deal counts on a guarantee from lead manager BTG Pactual to buy 56% of the shares, and a pledge from pension fund Previ to buy around BRL400m. Cash from the primary portion of the IPO will go to existing developments and new projects. Selling shareholders in the secondary offering include investor Roberto Sahade and funds linked to Patria Investimentos and Bradesco. Parent company CPFL Geracao is expected to cut its holding in the unit to 57.6%, from 63.0%. Bank of America Merrill Lynch, BTG Pactual and Itau are global coordinators, with Banco do Brasil, Bradesco and Morgan Stanley as bookrunners. Formed through the 2011 merger of CPFL Energia and ERSA, CPFL Renovaveis operates hydroelectric, wind, solar and other types of renewable power generation in Brazil, with 5,553 megawatts installed capacity.
Banorte Ready for FO
Mexico’s Banorte is scheduled to price an equity follow-on today, raising more than MXP29bn ($2.29bn) in much needed capital. The bank is selling 403m primary shares, assuming a 15% greenshoe is used, which would raise MXP29.15bn at Monday’s MXP72.34 closing price. The transaction has been challenged to raise its initially targeted $3bn amount by the bank’s shares falling 11.3% since the MXP81.55 close immediately prior to the June 12 announcement of the transaction. This fall comes versus a 1.1% rise in the Mexican Bolsa during that time. The plans were announced the day after Banorte agreed to buy minority stakes in Seguros Banorte Generali and Pensiones Banorte Generali from Assicurazioni Generali for $857.5m. In addition to funding that acquisition, the bank will use the proceeds to pay back a loan and buy out the IFC’s remaining shareholding. The shares in the follow-on should represent 14.75% of the bank post-sale. Bank of America Merrill Lynch and Morgan Stanley are global coordinators and Banorte-Ixe local coordinator. Banamex, BBVA Bancomer, BNP Paribas, BTG Pactual, Goldman Sachs, Itau, JPMorgan, Mistubishi-UFJ and Nomura are joint bookrunners.
Ouro Verde Takes IPO Step
Brazilian fleet outsourcing provider Ouro Verde has made the initial registration for its planned IPO. The amount and timing remain to be determined, though officials have previously told LatinFinance that the company would target up to BRL1bn ($450m). The company plans to use 77% of the primary proceeds for organic growth and 23% for working capital, according to a regulatory filing. The deal will also include a secondary portion of shares sold by founder Celso Antonio Frare – who is raising funds for a reorganization of his holdings, putting the Martini Meat and Ritmo Logistica units under the Novo Oriente vehicle through which he controls Ouro Verde. Ouro Verde booked BRL177m in Ebitda in the first half of this year, up from BRL132m in the corresponding part of 2012, and saw BRL281m Ebitda in full-year 2012, following BRL334m in 2011. Credit Suisse, HSBC, Itau and Santander have been hired to manage the sale.
Colombian RE Fund to Sell Additional Shares
Colombia’s Terranum Inversion is planning to sell a tranche of new shares in its Patrimonio Autonomo Estrategias Inmobiliarias real estate fund, raising COP110.2-COP179.0bn ($58m-$94m). The fund plans to sell 14.2m-22.8m shares at COP7,840 each today through Friday, according to a regulatory filing. This compares to the COP7,757 July 8 trading level, the most recent listed on the fund’s website. Existing holders will have first crack at the new shares during the first two days of the sale period, with any remaining shares available to the public. The fund, considered to be the only asset of its kind in Colombia, acquires and manages operating commercial property throughout the country. Proceeds from this week’s sale will be used to acquire additional properties. Corredores Asociados is managing.
Batista Sells More OGX Shares
Brazilian billionaire Eike Batista raised BRL75.4m ($34m) from the sale of 56.2m shares of OGX Petroleo e Gas, according to regulatory documents. The move cuts his stake to 57.18%, and is the second such move this year. In May the billionaire sold 70.5m shares to raise BRL121.8m, and called it a minimal portfolio adjustment that he didn’t plan to repeat. The EBX group oil company faces a liquidity crunch after failing to meet production goals. Its shares are 90% down in the last 12 months, and the price of its 2018 bonds has dipped below 20 cents on the dollar and has creditors bracing for a restructuring.
SMU Needs Equity Capital
Chile’s SMU plans to increase its equity capital by $500m after an accounting review revealed higher losses and a breach of debt covenants, the retailer says. The company had undervalued its store-lease obligations by CLP38bn ($75m), leading to a 4.4% drop in Ebitda that means its debt coverage ratio slipped to 1.4x, lower than the 1.5x required in its bond covenants. The equity raise will need to be approved by shareholders, and could result in an a domestic or international market public sale, it says. It does not provide additional details, but the Alvaro Saieh-controlled company has been expected to hold an IPO, which it filed for in 2011 via Celfin and Santander before putting it off. SMU sold bonds in the international market for the first time in February, raising $300m in 7.75% 2020 NC4 notes.