Brazil Follow-On Comes at Steep Discount

Brazil small-cap homebuilder Inpar has raised BRL280m through the sale of 87.5m shares at BRL3.20. That the deal was priced at all is an encouraging sign, and investors who participated could end up benefiting from the substantial haircut demanded of the issuer and potential post-deal recovery of the share price. The stock was clobbered in the sessions leading up yesterday’s pricing, says a buysider who did not participate. At BRL3.20, the shares were offered at a 4.5% discount to Tuesday’s close and 18% below the recent January 19 high of BRL3.91. Competing for investor attention with PDG Realty, a much larger and more widely followed homebuilder that is slated to price its follow-on Thursday, may also have contributed to the deal’s difficulty in pricing. Credit Suisse, Bradesco BBI, HSBC and Santander led Inpar’s follow-on.