Category: Equity

Colombia’s Grupo de Inversiones Suramericana has launched a COP3.9trn ($2.09bn) domestic equity follow-on, seeking funds to pay for its acquisition of ING’s LatAm pension fund and insurance assets. The conglomerate is selling 120m preferred non-voting shares at COP32,500 each, during an order period closing November 22. The price represents a 3.1% discount from the COP33,545 moving average price during the month prior to Sura’s board’s approval of the sale, and a 0.85% discount to Monday’s COP32,780 close. The deal is local only, though some international participation is expected. This marks a change from the issuer’s original plan to combine domestic and 144a issue. As a result, the borrower has reduced the larger line-up of banks mandated on the original deal, leaving just Bancolombia and Santander as leads. The list had also included acquisition bridge loan lenders BBVA, Deutsche Bank, HSBC, JPMorgan, and UBS. Meanwhile in Colombia’s busy ECM, Empresa de Energia de Bogota is set to allocate its COP700bn ($360m) follow-on as soon as this week, and Davivienda is raising COP480bn-COP800bn ($253m-$422m) in a follow-on closing next week.

Empresa de Energia de Bogota’s COP700bn ($376m) equity follow-on has seen orders of 1.3 times that amount after books were recently closed. The utility is expected to upsize the deal to about COP770bn, according to a person familiar with the transaction. The Colombian utility offered 538.5m shares at COP1,300 each. EEB plans to use the proceeds to fund its expansion plans. Corredores Asociados is lead manager. EEB Shares closed Friday at COP1,325.

With follow-ons from blue chips such as Empresa de Energia de Bogota and Davivienda filling their books, Colombia’s equity market is set be tested with a large deal from Colombia’s Grupo de Inversiones Suramericana. The financial conglomerate has filed to sell 120m shares, which would raise COP4.07trn ($2.19bn) at Friday’s COP33,900 closing price. Details on sale price and opening date for the offer could be announced as soon as today. The challenge, local bankers say, will be offering buyers enough of a discount while still reaching the large size the company needs to help fund the EUR2.615bn ($3.76bn) acquisition of ING’s LatAm pension fund and insurance assets agreed earlier this year. “It’s a great company, but a tricky equity story,” says a banker away from the deal. Sura will sell non-voting preferred shares paying a 3% dividend, which bankers say may also represent a challenge given the deal’s large size. A series of well-received follow-on sales in the Andean nation at a time when other countries remain shut to new issuance suggests there is appetite for high-quality Colombian issuers. Sura CFO Andres Bernal Correa told LatinFinance in August that BBVA, Deutsche Bank, HSBC, JPMorgan, Santander and UBS and Corredores Asociados had been hired to lead the deal, a third of which was expected to go to international investors.