Banregio IPO Lands At Low-End

BanRegio has priced a MXP2.09bn ($178m) IPO, landing near the bottom of its pricing range. The deal marks Mexico’s second IPO of 2011 following a MXP3.89bn Aeromexico sale in April. The bank, which focuses on lending to small and medium-sized businesses, priced 65.1m shares at MXP32 each, including a 15% greenshoe, versus the MXP31.50-MXP40.00 range it had been marketing. Demand was heard at 2.4x. Half of the buyers were expected to be Mexican retail investors, with the rest comprising Mexican and international institutions. The deal included a secondary sale of 18.9m shares from controlling shareholders. Despite a tough environment for LatAm IPOs this year, participating investors liked the bank’s focus and its expansion strategy, which includes plans to enter 8 more states in the center and south of the country. The transaction represents a 19.6% stake in BanRegio, which had MXP53.5bn in total assets at year-end 2010, up 12.3% from 2009. Corporate loans constitute 80% of its MXP24bn loan portfolio. Founded in Monterrey in 1949 by Manuel Santos Gonzalez as Banco Regional del Norte, the lender is present in 13 Mexican states in the north and center of the country. Banamex and BBVA Bancomer acted as leads.