GrupoSura Mandates On FO

Colombia’s Grupo de Inversiones Suramericana (GrupoSura) has selected BBVA, Deutsche Bank, HSBC, JPMorgan, Santander and UBS to lead the international tranche of its up to $2.1bn equity follow-on offering, Andres Bernal Correa, the company’s vice president of investment and finance, tells LatinFinance. The same international institutions have provided $1.65bn in bridge loans which can be disbursed anytime over a 1-year period and will carry a tenor of 1-2 years. The move is part of a financing plan to cover the cost of the recently agreed EUR2.615bn ($3.76bn) acquisition of ING’s LatAm pension fund and insurance assets. The company is targeting a $700m size for the foreign follow-on and a larger $1.4bn-equivalent to be placed among locals via Bancolombia, which along with Banco de Bogota and Davivienda has also given GrupoSura up to $1bn in bridge financing. UBS and Bancolombia acted advisors to GrupoSura on the acquisition. Proceeds from the credit lines are slated only to fund the acquisition, but hopes are that the company will not have to tap the bridge, Bernal says. Equity financing is seen as way to the ease pressure being exerted by the ratings agencies like S&P, which placed the company’s BBB minus rating on creditwatch after noting that incremental indebtedness from the acquisition could impact GrupoSura’s credit profile. The FO is expected to be launched in October, but with bolsas across the region tumbling 5% or more Monday after S&P took away the US’s triple A credit rating over the weekend, questions remain about the ability of any company to tap equity markets, at least in the short-term. “We hope that markets will calm down in a few weeks…and that it will not affect (LatAm) as much as others,” Bernal adds. The amount of funding available to the company through various sources exceeds the amount required for the acquisition, notes Bernal, leaving some breathing space should other markets close. These include about $500m of cash on hand. Ideally, the c