Category: Equity

In the midst of selling its Brazilian Pactual unit to BTG, UBS has lost a key New York-based ECM banker. Enrique Corredor, an executive director in the LatAm ECM group, has left the firm, according to people familiar with the move. It was not immediately clear where he is headed, though according to one market rumor, he may be joining BTG, the Brazilian startup investment bank led by former UBS FICC chief Andre Esteves. If that were the case, it would reveal something about BTG’s ambitions in LatAm investment banking. Corredor, a specialist in LatAm ECM, has worked on a number of deals from issuers based in the region, including Brazil. His joining BTG as a New York-based banker would mean the shop is looking distribute deals originated in Brazil and elsewhere in the region to US-based equities investors, putting it in direct competition with the likes of Itau BBA, Bradesco BBI as well as all other shops focusing on Brazil ECM. Corredor’s departure is a negative for the Swiss bank since he played an important role in its successful ECM franchise, say to people close to the executive. UBS’s LatAm ECM platform continues to be co-led by Evandro Pereira, MD, who is understood to still be at the firm, says a New York-based executive. This year, UBS Pactual was sole lead bookrunner on BR Malls’ follow-on, and joint-led VisaNet’s IPO, as well as follow-ons for MRV, Brasil Foods and Natura. A UBS spokesman declines to comment.

BBVA’s Colombian unit has sold COP198.1bn ($99m) in 6 and 11-year bonds in the domestic market. It sold COP43.1bn in 2015 bonds paying the IPC inflation index plus 4.58% and COP155bn in 2020 bonds paying IPC plus 6.69%. Demand reached COP400.9bn, says a broker selling the notes. The bank placed only two of a possible seven tranches, electing to not issue fixed-rate bonds or bonds linked to the DTF rate. BBVA’s own local capital markets coordinated the transaction, rated AAA on a national scale. The sale is the second from a COP500bn program, and follows a placement of COP301.9bn done in August 2008.

As expected, Santander has filed to issue Brazilian depository receipts on the Bovespa. Documents detailing the issue were not available late Friday, but timing indicates the Spanish bank could price its offering sometime in September. Banks heard tapped to lead the offering include Santander, BofA-Merrill, Credit Suisse and UBS Pactual. The rationale behind the issue is to allow Santander’s Brazil bank, which is among the country’s top 3 private sector institutions, to be able to finance itself, says a banker familiar with the situation. Having stock would also give Santander currency with which to acquire other banks.

Barclays has hired Andre Laloni as a director in its Brazil investment banking effort. The executive, who has familiarity with the M&A and ECM products, will be a coverage banker and report to Alceu Lima, head of Barclays’ Brazil office. Laloni was last at Goldman Sachs, having left the firm at the end of last year. He covered utilities and industrials there, and his new coverage has yet to be defined. So far he is the only senior-level banker at the shop, though more are likely to be hired as it is expanding its product offering in Brazil.

Santander is readying what will effectively be an IPO on the Bovespa worth up to $3bn equivalent. Sell-side officials involved confirm the process has been in the works for several months via Santander’s investment banking unit, and an offer is very likely in the second half. Size is rumored in the BRL4bn-BRL6bn range, with Credit Suisse and BofA-Merrill Lynch heard involved, and UBS Pactual also vying for a spot, say people away from the transaction. A local equity issue is designed to give the bank –among Brazil’s largest private sector institutions – a degree of independence from its parent, and the ability to finance itself domestically, say people familiar with the Spanish bank’s thinking. Timing is also supportive. Investor interest in Brazil’s financial sector has never been stronger, with 2 large credit card issuers, Redecard and VisaNet, raising over BRL13bn in equity since March 2008. There is also a relative dearth of new issues from large-cap banks. The deal would give the Spanish bank a substantial boost in the ECM underwriting league tables. In the rankings, Santander stands at number 3 behind Citi and JPMorgan, respectively, with $992m in volume though July 21, according to Dealogic. The biggest booster of Santander’s ranking in 2009 is the VisaNet IPO, which it led because the parent was a major selling shareholder. The same applies for its lead role in the upcoming trade. But Santander’s banking unit, which includes 8 dedicated ECM executives on the ground in Brazil, as well as coverage bankers, has made an impressive ascent. This time in 2008, it ranked number 8 with about a tenth of the volume of Itau BBA, which was leading, according to Dealogic. Bankers leading the effort at Santander say the institution hopes to leverage its balance sheet and local presence to increase its share of the Brazil fee pool. Santander has so far this year had bookrunning roles on follow-ons for BR Malls, MRV and ICA. It last year acquired ABN AMRO’s Banco Real to bec

Mexico’s ICA is on deck to price its offering of 113m shares today. The stock has traded down some 5% since the deal’s announcement, in line with the IPC’s decline over the same time period. ICA shares closed at MXP21.90 Wednesday, down 3.8%, while the ADS closed at $6.40, down 5.3%. At those levels, today’s deal could raise MXP3.29bn ($245m), assuming an additional 37m unit greenshoe. Merrill Lynch and Santander are leading.

Chilean casino and hotel operator Enjoy has raised CLP23.1bn ($42.3m) in an IPO on the Santiago stock exchange. Enjoy placed 462m shares, representing 30% of its equity, at CLP50 each. Local institutional investors acquired a total of 184m shares, foreign institutional investors 35m, Enjoy employees 22m and retail investors 220m, according to regulatory documents. The funds will be used to help finance the issuer’s CLP182bn ($329m) investment plan, which includes several new casinos in Chile and a possible venture in Croatia. LarrainVial managed the sale. The offer was Chile’s first IPO since Azul Azul, the holdco for professional soccer club Universidad de Chile, raised $14.7m-equivalent in November 2008.

Yesterday the BM&FBovespa held its last human-operated floor auction. Starting today, all trades on the exchange, from cash equities to commodities futures and derivatives, will be executed solely electronically. The change was long in the making but gained momentum in the past 2 years as the two exchanges demutualized, went public, merged with each other and linked up with the CME’s Globex platform. With the change, the image of floor traders dressed in yellow and red holding handsets and yelling their orders at an auctioneer – for years held up as a symbol of both the vibrant and the emerging nature Brazilian markets – passes into history. As has happened in most other marketplaces around the globe, explosions of shouting male voices and frenetic gesticulation on a floor littered with order slips are being replaced with the steady quiet hum of servers. Volumes on the BM&FBovespa, meanwhile, are expected to rise substantially in the coming year as overseas investors begin to employ high frequency algorithmic trading servers and interest in Brazilian securities broadens.

VisaNet shares rose 11.8% in their first day of trading to close at BRL16.77. The year’s biggest IPO to date was priced at BRL15.00 on Thursday night, raising the company’s shareholders BRL8.6bn. The first day lift was a positive sign, though some investors hoped stock would trade up 20% or more. “Some people were expecting more than this,” says one portfolio manager who bought the deal. But the performance was nothing to complain about, he adds, noting it was important that the company capped the deal at BRL15.00 instead of breaching the top of the range. That might have resulted in a poor aftermarket and disappointed investors, which the issuer wanted to avoid, according to bankers on the deal. The stock’s performance Monday also suggests, at least initially, that the deal was well priced. Bradesco BBI, Banco do Brasil, Santander and JPMorgan were global coordinators, with UBS Pactual and Goldman Sachs as joint bookrunners.