Santander Plots Brazil Listing

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