Category: Equity

El Tejar, the Argentine agricultural developer with assets in Argentina, Brazil and Uruguay, has filed for an IPO via a BDR issue through Itau BBA and Morgan Stanley. The company most recently visited the markets seeking debt financing – a $150m A/B loan including a $30m 7-year A loan at Libor plus 490bp and a $120m B loan via Standard Bank paying Libor plus 450bp. The deal is heard to have struggled to get a full book, say bankers away from the process. The company not yet indicated the size of its planned offer but timing of the filing indicates a deal is targeted by year-end. It is the second Argentine company to recently file for a Brazil IPO. San Antonio Internacional, which has many assets in Argentina, also filed with the CVM for an IPO. The fate of both deals largely depends on a dramatic improvement in the Brazilian equity market. A continuation of the current environment will almost surely lead both issuers to withdraw, say bankers watching LatAm ECM.

Brazilian credit card provider VisaNet has filed for an IPO on the Bovespa via the sale of secondary shares held by the banks that own it. Those include Bradesco (39%), BB Investimentos (32%) and Banco Real (14%), with Visa International also owning a 10% stake. Bradesco’s BBI unit will lead the local offering with BB Investimentos, Santander, JPMorgan and Goldman as joint leads. The main comp is Redecard, the Brazilian rival held by Citi, Itau and Unibanco that went public last year via a $2.4bn IPO, and followed up with a $724m secondary offering in January. In the quarter prior to Redecard’s offering, the company posted adjusted Ebitda of BRL317m. VisaNet’s H1 adjusted Ebitda for the period prior to IPO is BRL862m, which places the companies’ revenues in line with each other and suggests VisaNet’s IPO offering could be of comparable size to that its rival’s in 2007. Redecard went public at BRL25.00 and closed at BRL29.00 yesterday.

Brazil’s equities, futures and derivatives exchange has launched two new indices to track the performance of small and medium-sized companies. The BM&FBovespa MidLarge Cap (MLCX) and the BM&FBovespa Small Cap (SMLL) indices will track companies whose market caps fall within the assigned categories. Some 85% of the Bovespa’s market cap falls under the MidLarge Cap parameters, says the exchange.

Brazil’s Itau BBA leads the LatAm ECM league table, perhaps for the first time ever, after dethroning longstanding incumbent Credit Suisse. Itau has led $4.53bn worth of equity deals, across six offerings year-to-date, topping Credit Suisse’s $4.03bn across seven deals, according to Dealogic. Volume for the Brazilian shop is almost twice that of the corresponding period of 2007, but it has done less than half the number of issues. JPMorgan comes third for ECM, with $3.77bn in volume, followed by Unibanco, UBS and Bradesco. “We’ve been able to leverage our corporate business and relationships by providing top quality and proven execution in equities, M&A and fixed income,” boasts Jean-Marc Etlin, head of Itau BBA. Itau is also raking in fees, with $82bn from ECM, M&A and DCM this year. Itau had lead roles in mega follow-ons Redecard, Gerdau, and Vale, as well as OGX’s June IPO. And the pipeline looks firm, not just from Brazil. Itau has lead roles in two upcoming IPOs from non-Brazilian issuers, an up to $4bn jumbo from Argentina’s YPF – which is hoping to come this year – and San Antonio Internacional, which could be over $500m. Rivals are quick to dismiss the achievement, in what they say is an unrepresentative year for flow. Citi and JPMorgan also held pole position this year, only to fade away, they say. But based on strong ties to high profile issuers, Itau’s equity platform appears robust. Meanwhile, last year’s leader UBS appears to have dropped out of the race, while compatriot Credit Suisse struggles to distance itself from the slew of underperforming IPOs it launched over the past two years. Many of last year’s equity dogs featured questionable pre-IPO loans handed out to issuers for reportedly juicy fees.

Summer Brasil Turismo has canceled plans to go public on the Bovespa. The transaction had been on ice since the spring, when it was postponed due to poor market conditions. Following the expiration of its postponement period , the company formally removed its filing from the CVM. “We are considering various alternatives,” Andre Menezes, head of IR, tells LatinFinance, adding Summer Brasil would consider a private share sale, or an attempt to return to the public markets at a later date. Menezes declined to state the amount of proceeds Summer is seeking to finance its tourism-related developments in Brazil’s northeastern region. UBS was to lead the equity sale, originally announced in January.

Despite wretched market conditions for LatAm issuers, especially Argentine ones, YPF, the country’s biggest oil and gas company, is hoping to bring its up to $4bn IPO sometime in the last four months of 2008, say people familiar with the process. If successful, the transaction would set a new benchmark for Argentina, testing investor appetite for what is seen as a strong asset in a volatile, unpopular jurisdiction. The company, which last year was valued at some $15bn when its parent Repsol sold it to the Eskenazi group – a private consortium with ties to the government – plans to IPO 20%-24% of its equity. The company has improved operations, say officials close to the issuer, and the $15bn value is likely to serve more as a baseline value than an average one, they say. As such, the IPO could be in the $3bn-$4bn size range, according to a person familiar with the deal. No official results have been reported, so any estimates on the size of the IPO or the company are preliminary and unofficial. YPF is also heard to not be desperate to price the deal in 2008, meaning if market conditions remain unfavorable, it could carry the offering over into 2009. Credit Suisse and UBS are heading the deal, with Goldman and Itau BBA also carrying senior roles.

San Antonio Internacional, the Bermuda-based privately held onshore drill servicer, has filed for an IPO on the Bovespa through a listing of BDRs via Itau BBA, the lead, Credit Suisse and Deutsche Bank. The company, whose assets are spread around Argentina, Mexico, Venezuela, Colombia, Bolivia, Ecuador and Brazil, is heard to be targeting an offering of well above $500m to be launched in September, say executives familiar with the company’s plans. San Antonio is rotating through the LatAm capital markets on a nonstop mission to solidify its capital structure. It just last month closed a $575m multi-part refinancing of a bridge loan, more than 80% of which carries spreads estimated at over 1,000bp over Libor. And it is currently arranging a pre-IPO loan with two of its underwriters that steps up to similarly lofty levels. The $100m 18-month financing will pay Libor plus 550bp in years 1-6, Libor plus 900bp in months 7-12 and Libor plus 1,500bp in months 13-18, according to the prospectus. Itau will take $75m while Deutsche will take $25m in the pre-IPO loan. San Antonio’s subsidiary Demeter also has a BRL50m loan due 2013 with Itau at DI plus 200bp. Bankers away from the deal claim Itau and Deutsche secured IPO mandates thanks in part to their lending capabilities. GP purchased San Antonio from Pride International for $1bn, $600m of which was debt. The company’s indebtedness stands at roughly $700m, according the prospectus, which also states adjusted Ebitda for 2007 was $251m. If San Antonio’s 2008 revenues stay on track with first half adjusted Ebitda of $124m, its current leverage ratio would be roughly 2.8x.