Avianca ADS Land Below Range

Avianca has priced the debut of ADS representing preferred shares of the Avianca Holdings entity below the range, and should raise $408m. The total demand was not immediately available late Tuesday. The airline is selling 12.5m primary ADS and 14.7m secondary ADS, assuming a 15% all-secondary share greenshoe, at $15.00 each, according to people familiar with the transaction. The price comes versus a $17.00-$20.00 range, and a COP3,945 ($2.06) close Tuesday of the preferred shares, that suggested a level of $16.48 per ADS. Each ADS represents eight Avianca Holdings preferred shares. The discount to the local shares was somewhat anticipated, according to people following the sale, based on the lower domestic liquidity levels. The secondary portion is sold by former Taca executives Juaquin Palomo and Alfredo Ratti and the entities representing the controlling Eframovich brothers and Kriete family. The Eframovich brothers should control a position equal to 78% of the common stock following the deal. The Panama-domiciled Colombia-listed holdco is raising funds to modernize the Avianca-Taca fleet. JPMorgan and Citi led the transaction, joined by UBS, BTG Pactual and Deustche Bank. Avianca and Taca merged in 2010, and the domestic IPO of the preferred shares raised $283m-equivalent in 2011.