Cyrela Prints Follow-On In Down Day

After seeing its stock careen 6.9% yesterday, Cyrela printed its follow-on at BRL22.00, a 1.8% discount to the close of BRL22.40. The offering consists of 43m primary shares, plus 4.3m hot issue shares and an expected 6.5m greenshoe shares, which together yield gross proceeds of BRL1.18bn. The weak performance is in line with the rest of the sector Tuesday. PDG Realty fell 5.7%, Rossi fell 7.2%, Multiplan fell 3.0%, MRV was down 4.9% and Gafisa dropped 7.1%. The Bovespa fell 3.0%. “Real estate is a high beta sector, so if it falls more than the Bovespa on a day like today, that’s not surprising,” says a New York-based LatAm equity investor who opted not to participate in the deal. Cyrela was the first Brazilian homebuilder to do a modern Bovespa IPO, opening the gates for a slew of subsequent homebuilder offerings and several more from sectors related to construction. The deal is led by Credit Suisse, with Bradesco BBI, Goldman Sachs, Itau BBA and Santander as joint leads.