ECM Volume Down; Brazilians Lead

Overall ECM volume is again disappointing this year, with issuers raising $9.7bn through 37 deals in the first half, down 55% from the corresponding period in 2011 ($21.4 through 48 deals), according to Dealogic. It is the region’s lowest half-year volume since 1H 2009. The BRL1.5bn ($712m) Suzano follow-on last week vaulted BTG Pactual into the lead in the ECM league tables, with $1.15bn in volume from 10 deals, with the bank’s own IPO also having boosted its total back in April. The Brazilian bank is followed by Citi ($1.08bn from 6 transactions) and JPMorgan ($919m from 5). Issuers got off to a late start in 2012, with relatively little volume coming before March. “Nobody was ready in the first quarter. It was a bit frustrating. If the signs of a recovery had come a little earlier in 2011 we would have had more companies ready to tap the market in January and February,” Fabio Nazari, head of ECM at BTG, tells LatinFinance. Follow-on trades, dominant in the first half compared to IPOs, should continue to be responsible for most of the activity in a second half that is difficult to predict. “Given the fact that the market has been quite challenging, advisors are likely to be more honest with issuers about the feasibility of each deal. This brings confidence to those deals that do hit the road. Each one needs to be bulletproof,” he says. In terms of fees, BTG led with $26m in revenue, or 12.7% of the pool, followed by JPMorgan ($24m, 11.5%) and Citi ($16m, 7.7%).