Fibra Inn Checks in at Midpoint

Mexico’s Fibra Inn has priced a MXP3.81 ($307m) IPO, landing at the midpoint of the range. The deal drew at least 2x demand to become the second hotel-focused and fourth overall Fibra Mexican real estate income trust. Fibra Inn sold 127m primary and 79m secondary shares at MXP18.50 each, versus a MXP17.25-MXP19.75 range, according to sources following the deal. The total assumes the exercise of a 15% greenshoe. The issuer had been expected to sell about 50% of the sale internationally, according to offering documents. The secondary portion included shares sold by Indigo Capital, which is to keep a small holding, and Citigroup Venture Capital International, which exits completely. “This is a specific play that is distinct to the other Fibras, and the sector offers an interesting potential given the macroeconomic development of the country,” says a Mexican equity analyst looking at the sector. He notes that Fibra Inn’s focus on international hotel chain properties is distinct from the Concentradora Fibra Hotelera, which raised MXP4.14bn in an IPO last year and is focused on domestic brands. As with Fibra Hotelera, the properties offer a play on the steady growth expected for business travel between Mexico’s cities, rather than the more cyclical tourism industry. The deal should result in a 77% public float. Proceeds will be used to purchase assets to add to the trust’s portfolio, which initially includes eight Holiday Inn and Hampton Inn hotels in seven cities throughout Mexico, and options to buy six more. Actinver, Credit Suisse and Santander managed the sale. It is the second Fibra deal of 2013, and bankers expect 5-6 total before the end of the year. Prudential is up next, with the MXP10bn Terrafina industrial-focused trust expected to price next week.