Santander Chile Pops after Well-Bid FO

Santander Chile Shares rose nearly 10% in their first session following a well-bid $949m follow-on, reflecting the transaction’s 2x-plus demand. It sold 14.74bn shares, represented by 14.19m ADS, at CLP33.00, or $66.88 per ADS, to bring in a total of CLP486.47bn ($949m). The price was slightly higher at $66.58 at Tuesday’s close, and the shares rose 9.45% Wednesday to $72.87. The deal saw $2.01bn in competitive demand from 2,041 accounts, Santander Chile says. Foreign ADS buyers accounted for 65.02% of the offer, with local pensions and institutions getting 20.00%, foreign institutions buying local shares getting 7.94%, local retail investors 3.52% and retail ADR buyers 3.52%. In all, about 70% of the buyers were international, which bankers say is much higher than their the one third foreign participation normally seen in Chilean deals. Analysts initially expressed skepticism about the strength of demand, but bankers say a 7.4% drop in share price between the deal’s announcement and Tuesday may have lured buyers who always considered the bank a quality asset. Santander’s decision to extend the lockup period to 1 year, also helped, bankers say. The deal, sold through the Teatinos Siglo XXI Inversiones vehicle, represents 7.8% of the Chilean unit, which now has a 33% free float, up from 25%. Santander, Bank of America Merrill Lynch and Credit Suisse managed the international portion, while Santander and LarrainVial handled Chilean orders. The sale was somewhat overshadowed by the announcement late Tuesday of Santander’s complete pullout from Colombia, another part of the plan to cover a EUR6.47bn ($10.08bn) capital shortfall to meet new capital requirements imposed by European regulators. The bank has said it will retain earnings and sell assets in order to raise its core capital ratio to 10% from about 8% by June. It is also seeking to sell up to 8.2% of the Brazil unit, which could bring in as much as $2bn. The next sale in Chile’s market is the government selldown