Bancolombia Launches $885m Preferred Share Offering

Bancolombia has begun a massive 64m preferred share offering that stands to generate $885m for Colombia’s largest financial institution. The issue, which represent 8.12% of all shares outstanding, will be offered to established shareholders at COP26,000 ($13.83) per share, and the unsold balance is to be sold to overseas buyers, Bancolombia says. The shares are registered both in the local Colombian bourse and in New York’s NYSE Euronext as ADRs. The deal is being managed by Bancolombia’s investment banking arm, while Brigard & Urrutia is handling the legal aspects of the transaction. The bank has sought additional capitalization especially since it spent $150m in joining Grupo Sura’s bid for ING’s LatAm insurance assets late last year. It has also been trying to improve operational efficiency. In a recent LatAm banking note, Santander’s equity research analysts kept a hold rating on the bank’s shares, noting that they “do not expect a turnaround in the [bank’s] cost efficiency situation and [remain] discouraged by the bank’s relatively weak capital position.”