Banorte Clinches Follow-on

Mexico’s Banorte has set a price for an equity follow-on that should raise at least $2.2bn, coming at a 0.1% discount and heard getting multiple times demand. The bank priced at MXP71.50 per share, according to people following the sale, indicating a MXP28.78bn ($2.28bn) size based on a 350m share base deal and 15% greenshoe. The level compares to Tuesday’s MXP72.21 closing price. The shares had dropped 13.0% this year through Tuesday and 11.5% since the deal’s June 12 official announcement, whittling away the deal’s original $3bn target. Investor concerns have included the weight of Banorte’s recent acquisitions, as well as analyst expectations for a more challenging environment ahead. Nevertheless, the bank gets capital to boost its ratios, and the Mexican market gets encouragement that it can withstand global volatility as it heads to a record year for new issuance. Proceeds are marked to help fund the $857.5m purchase of minority stakes in Seguros Banorte Generali and Pensiones Banorte Generali from Italy’s Assicurazioni Generali, and buy out the IFC’s remaining shareholding. Heading into pricing, the bank expected to place 50% of the shares in Mexico and 50% internationally. The shares in the follow-on should represent 14.75% of the bank post-sale. Bank of America Merrill Lynch and Morgan Stanley were global coordinators on the deal and Banorte-Ixe the local coordinator. Banamex, BBVA Bancomer, BNP Paribas, BTG Pactual, Goldman Sachs, Itau, JPMorgan, Mistubishi-UFJ and Nomura were joint bookrunners. The deal is Mexico’s largest equity sale since Santander Mexico’s $4.1bn IPO in September 2012.