Regional Equity Issuers Primed for Restart

With many would-be equity issuers close to registering fresh financials, bankers expect new filings in the region as soon as the end of this week and possible pricings as early as March. Two Brazilian IPOs were postponed earlier this month, but reasonably successful sales from Cementos Pacasmayo and Bancolombia have generated optimism that follow-ons can restart the market. The question is whether investors and issuers can meet eye to eye on pricing given how disagreements over valuations have wrecked past transactions. “Deals can get done this year. It’s just a matter of finding the right valuation,” says a New York ECM banker. Bankers see at least 8 new pricings in the March/April window. Colombia may see the first launch, with Construcciones El Condor targeting the week of March 5 to start the sales process for its IPO if regulators approve the transaction in time, says a company official. The engineering and construction company plans to raise COP150bn-COP200bn ($84m-$112m) through an expected 15%-20% float. Bancolombia is managing the transaction. A $100m-plus-equivalent follow-on from Acerias Paz del Rio, a steelmaker that is part of the Brazil’s Votorantim group, could follow. In Chile, Cencosud is also considering a follow-on involving the sale of ADRs, as part of a $2bn total capital increase. JPMorgan and UBS are heard to have the mandate, with Santander and BBVA expected to work on the local portion. Cencosud officials did not return requests for further comment. The Mexican market is still awaiting a filing from Grupo Alfa’s Alpek unit, which had been heard aiming for the January/February window. Regional ECM volume was at $2.07bn through Friday, according to Dealogic, down from $5.66bn during the same period in 2011.