The pace of Latin American equity offerings quickened through July and August, with the region enjoying high investment inflows before the summer break in the US.

Brazilian inflows peaked after the country’s interim administration, led by Michel Temer, named former central bank governor Henrique Meirelles as nance minister. Investors said appetite for the region’s largest economy grew in the hope that Temer will implement market-friendly policies.

Brazilian corporates responded with two oversubscribed equity trades. First, Energisa tapped fund managers for a 1.54 billion reais ($474 million) follow-on equity o ering, with the energy entity selling 61.5 million primary shares and existing owners selling 12.3 million secondary shares.

After its share price more than doubled this year, two owners of Brazilian travel services rm CVC Brasil took advantage of a tourism boom just before the Rio Summer Olympic Games to sell down part of their stakes. The all-secondary restricted follow-on raised 1.24 billion reais, with the paper priced at 20.5 reais each. US private equity rm Carlyle Group sold 39.1 million shares, while Guilherme Paulus sold 21.4 million shares from his GJP Fundo do Investimento.

A secondary follow-on for retailer Cencosud raised $457 million with the sale of 171 million shares through Credicorp Capital and JPMorgan. 

Telecommunications firm Entel concluded the region’s largest equity offering of the year, raising approximately $574 million in a rights offering.

The momentum is expected to shift up further in September as hopes grow that equity inflows into emerging markets will increase, giving corporates ample chances to raise capital.

“Brazil remains hot, what with all the political movements going in the right direction for investor causes,” said one equity markets banker. “Peruvian indexes have been outperforming other LatAm indices over the last month as well.”

Brazilian reinsurer IRB-Brasil has revived talks of an initial public offering, which could raise up to 1.5 billion reais.

In Mexico, appetite for homebuilders has not subsided, as Vinte Inmobiliaria led early plans for an IPO. While no further details were revealed, a ECM source said the company could raise close to $100 million. If successful, Vinte would be the third offering from Mexico’s real estate sector this year, following trades from Javer and FHipo.

Final round

Mergers and acquisitions have also proven robust this year, with appetite for the region’s assets high.

US lender Citi has moved forward with the sale of its consumer banking arms in Argentina, Brazil and Colombia. Citi has received final bids

from BBVA, Banco Galicia, Banco Macro and Santander for its Argentine business, while Itaú BBA and Santander have expressed interest for its Brazilian assets. In Colombia, BBVA and Scotiabank are vying for Citi’s assets, which comprise its retail banking and credit card operations.

Citi is likely to divide the sale into individual agreements and the sale could net the US bank as much as $400 million, according to an M&A advisor in the region.

Banco do Brasil has also advanced talks on reducing its stake in Argentina’s Banco Patagonia. The Brazilian lender is plotting a “dual-track” sale, according to a banker familiar with the company’s plans. Banco do Brasil could oat a portion of its 58.9% stake in Patagonia through a re-IPO. Other Patagonia shareholders may also look to free up capital and reduce their stakes via the equity offering.

Colombian conglomerate Grupo Argos and its subsidiaries kept busy in August with two transactions. Argos USA, a subsidiary of Cementos Argos, agreed to buy US assets from Germany’s HeidelbergCement for $660 million and to help nance the acquisition, Cementos Argos agreed to sell a 20% stake in Argos Panama. Local builder Grupo Provivienda agreed to buy the stake for $126 million. LF