Banorte Details FO

Grupo Financiero Banorte has laid out additional details for its $3bn equity follow-on, picking Citi, JPMorgan and Morgan Stanley to manage international and domestic portions, joined by BTG Pactual, Itau, Goldman Sachs, Merrill Lynch, and Mitsubishi UFJ on the international and Banorte-Ixe on the domestic. The exact timing and number of primary shares to be sold remain to be determined, though a July pricing is expected. It plans to use the proceeds to pay back a loan, fund its acquisition of stakes in its businesses from Italy’s Grupo Generali and the IFC. The one-year $800m loan was signed in February, arranged by JPMorgan, Mitsubishi, Merrill Lynch and Morgan Stanley, and pays Libor+80bp. Grupo Banorte agreed Monday to pay Generali $857.5m for the purchase of Seguros Banorte Generali y Pensiones Banorte Generali. The IFC took a $150m stake in Banorte in 2009. Grupo Banorte bought out a third of the IFC’s stake in February, spending MXP2.1bn ($168m), and agreed to pay the development back a price equal to 54m of own shares to take out the remaining stake. Banorte’s core capital equated to 11.79% of its risk weighted assets at the end of the first quarter, and Banorte-Ixe, 10.62%, under Basel III methodology. Grupo Banorte is Mexico’s third-largest financial institution, with assets of MXP955bn. Banorte shares closed Thursday at MXP77.33, falling 5.2% during Wednesday’s and Thursday’s sessions, after the first announcement of the transaction on Wednesday.