Brazil IPOs Hit the Skids

Brazilian IPOs are finding it hard to meet the lofty expectations they and their bankers have been setting for themselves, further evidence that in the current environment, smaller, lesser known names will meet strong resistance. “Investors are tired of looking at small companies, and are being very conscious of liquidity,” notes an ECM banker at a major equity house. Trisul, a construction company, is expected to price its 33m share issue today in a range of BRL13.00-BRL15.00, but one experienced banker away from the deal predicted it could come with a hefty discount, at BRL11.00. JPMorgan and Morgan Stanley have joint books, according to Dealogic. Both Tenda and BicBanco priced equity late Wednesday evening below the midpoint. The former came at BRL9.00, versus a BRL10.50 midpoint, and the latter at BRL11.50, compared to a midpoint of BRL12.75. Sul America, an ING-owned insurance outfit, began trading on October 4 at BRL31, but has since dropped to below issue price. BB and HSBC led that offering. Also on deck in LatAm equity are Clarin, Marisa, Clinica las Condes, Helbor, Bovespa, Amil, Brasil Brokers, Laep, Agrenco and BR Malls, coming with a rights offering.