OHL Prices Follow-on Against Rough Backdrop

OHL Mexico has priced a MXP6.99bn ($524m) equity follow-on, landing at a slight discount to a share price that had been hit hard in the last few days along with the rest of the Bolsa. The Mexican unit of the Spanish concession operator is selling 241.2m primary shares, assuming a 15% greenshoe, at MXP29.00 each, according to a person following the sale. The price compared to Thursday’s MXP29.84 closing price. The shares had fallen 13.5% what in June, versus a 9.8% drop in the Mexican Bolsa during that time. About 55% of the sale went to international buyers. “This is a quality portfolio of assets, and there is still much opportunity in Mexico in the infrastructure space,” says an analyst following OHL Mexico. Expectations are a bit more cautious than earlier in the year, he says, but the global volatility has not yet done much damage Mexico’s positive growth outlook. The transaction was expected to represent about 13.9% of the unit and result in a 36% free-float. The issuer plans to use about half of the proceeds to make investments in projects and half to repay debt. BBVA and UBS were global coordinators, joined by Goldman Sachs and JPMorgan on the international portion and Santander on the local side. The deal should give some confidence to the other follow-ons in the region’s new issue pipeline. Next up is the MXP11.0bn Inbursa follow-on sale of secondary shares owned by CaixaBank, the MXP4.0bn OMA sale of secondary shares owned by ICA and a MXP4.4bn follow-on from Vesta. All three are scheduled for Tuesday.