Latin Finance - March/April 2010 - 10

Equity Lowering the Bar The region’s first two IPOs of the year, both from Brazil, failed to meet their stated pricing targets by sizable margins, kicking o what looked like a sour start to 2010. But investors and bankers o the deal, not to mention the ever optimistic leads on Aliansce and Multiplus, shrugged o the discounts as par for the course. “I think it’s fine – hey, they got it done,” says a New Yorkbased equity portfolio manager at a hedge fund with $750 million under management. He did not participate in the IPO for Multiplus, TAM’s frequent flyer program manager which priced an early February 39.3 million share o ering at 16.00 reais, The first two months of 2010 witnessed an explosion in some 24% below the midpoint of the 18.00-24.00 range. Lower infrastructure-related filings for IPOs. Some, like Julio Simões pricing may o er attractive entry points, he notes. and Mills, are virtually unknown by people outside the In a less rocky market, the hefty reduction in proceeds to construction and infrastructure businesses. The o ering sizes – 724 million reais from an initially expected 1.1 billion reais at least in the case of Mills, which said it would seek 525 million would have been viewed as a failure. But in the di cult market reais – did not impress market participants. conditions of the first two months, Most note that liquidity and issue merely not having pulled out – like size remain critical factors for IPOs, ECM Rank by Volume, Year to February 12 IMC, the restaurant company owned especially since small caps, which BTG shines, Credit Suisse in second by Advent – is labeled success. outperformed the MSCI LatAm and Rank Bookrunner Value $m # deals “The IPO market is not as simple Ibovespa in 2009, are seen as less today as some people would think,” of a sure bet in 2010. That smaller 1 BTG Pactual 341.74 3 notes a banker running Multiplus. issuers appear eager to tap despite not 2 Credit Suisse 302.83 3 Credit Suisse and BTG Pactual joint-led. meeting some important requirements 3 Banco Bradesco 232.35 3 Shopping mall operator Aliansce, of investors suggests not all equity 4 Banco Itaú 199.43 2 meanwhile, brought the year’s first hopefuls will succeed in e orts to raise 5 Santander 160.52 2 IPO, 22% below its targeted 11.50 funds. 6 Goldman Sachs 127.60 1 real midpoint at 9.00 reais to raise As of mid-February, neither 7 UBS 88.85 2 673 million reais via BTG Pactual, Itaú Julio Simões nor Mills had provided 8 JPMorgan 71.83 1 BBA, JPMorgan and Bradesco BBI. specifics of their deals. Their In addition to a highly discerning 9 HSBC 32.92 1 prospectuses aggressively touted investor base, markets in general a strong outlook for Brazilian Subtotal 1,558.07 4 have traded sideways or down in the construction and infrastructure, Total 1,558.07 4 period as global macro uncertainties amid a low-income housing push by Source: Dealogic swelled. Everything from interest rate the government. High profile events hikes to Chinese cooling and European like the World Cup in 2014 and 2016 sovereign debt angst directly impacted both IPOs and follow-ons. Olympics add luster. But bankers also point to a contamination in the ECM Among the potentially larger o erings in infrastructure advisory process that may be leading to a lack of realistic is OSX, the new shipping and oil and gas services company objectives when it comes to pricing. “No one wants to be the one belonging to Eike Batista’s EBX. The company’s charter says it to give the [issuer] client the bad news,” says an ECM banker at a has authorized a capital raise of up to 10 billion reais. OSX’s leading regional underwriter. main asset includes a yet-to-be-built shipyard, which will If investors tell the underwriters they are not happy with a include participation from Korea’s Hyundai, in the state of Santa certain valuation, there will be infighting in the group of leads Catarina. It hired Itaú BBA and Credit Suisse to lead its o ering. – which can often number as many as four for a medium-sized In tollroads, Ecorodovias is hoping to join three publicly o ering – to determine who will inform the client. The latter is listed operators, OHL Brasil, CCR and Triunfo, on the Bovespa often promised a rich valuation prior to having chosen its banks via an up to 2 billion-real IPO. Fabio Russo, who in January left for the deal, say equity sales and ECM executives. his post at CCR’s finance unit to become CFO of homebuilder Elsewhere in the new issue market, follow-ons have found São Carlos, remarks on the broad expectation that road themselves at the mercy of choppy conditions. Two small infrastructure will be the recipient of heavy government and aspiring issuers, Metalfrio and M. Dias Branco, opted to private investment in the coming several years. Brazil is trying withdraw bids to raise roughly 380 million and 470 million reais, to avoid bottlenecks in the growing commodities and export respectively. sectors, as well as tune up major transportation systems ahead Homebuilder Inpar’s February 2 follow-on priced at a 4.5% of marquee sporting events. LF discount to prior close and 18% below a late-January high. It bagged the company 280 million reais, via Credit Suisse, Bradesco BBI, HSBC and Santander. Fellow developer PDG Realty, a much larger company whose follow-on was supported from the start by a participation commitment from Vinci Partners – a new fund managed by former Pactual Partners – priced a well-bid 1.6 billion-real follow-on at virtually no discount to the close. However, it was hurt by the previous session’s 3.4% drop. Credit Suisse, Pactual, Itaú BBA, Goldman Sachs, Santander and Bradesco BBI led. Infrastructure Spree 10 LATINFINANCE March/April 2010

Latin Finance - March/April 2010

Table of Contents for the Digital Edition of Latin Finance - March/April 2010

Latin Finance - March/April 2010
Contents
Political Risk
Man of the Year
Santander Brazil CFO
Vale Fertilizer Strategy
Finance Minister Scorecards
Privatizing Codelco
Samurai Bonds
Peruvian Rail Investment
Brazil Investor Report
Parting Shot
Latin Finance - March/April 2010 - Latin Finance - March/April 2010
Latin Finance - March/April 2010 - Cover2
Latin Finance - March/April 2010 - Contents
Latin Finance - March/April 2010 - 2
Latin Finance - March/April 2010 - 3
Latin Finance - March/April 2010 - 4
Latin Finance - March/April 2010 - 5
Latin Finance - March/April 2010 - 6
Latin Finance - March/April 2010 - 7
Latin Finance - March/April 2010 - 8
Latin Finance - March/April 2010 - 9
Latin Finance - March/April 2010 - 10
Latin Finance - March/April 2010 - 11
Latin Finance - March/April 2010 - 12
Latin Finance - March/April 2010 - 13
Latin Finance - March/April 2010 - 14
Latin Finance - March/April 2010 - 15
Latin Finance - March/April 2010 - Political Risk
Latin Finance - March/April 2010 - 17
Latin Finance - March/April 2010 - 18
Latin Finance - March/April 2010 - 19
Latin Finance - March/April 2010 - 20
Latin Finance - March/April 2010 - 21
Latin Finance - March/April 2010 - Man of the Year
Latin Finance - March/April 2010 - 23
Latin Finance - March/April 2010 - 24
Latin Finance - March/April 2010 - 25
Latin Finance - March/April 2010 - Santander Brazil CFO
Latin Finance - March/April 2010 - 27
Latin Finance - March/April 2010 - Vale Fertilizer Strategy
Latin Finance - March/April 2010 - 29
Latin Finance - March/April 2010 - Finance Minister Scorecards
Latin Finance - March/April 2010 - 31
Latin Finance - March/April 2010 - 32
Latin Finance - March/April 2010 - 33
Latin Finance - March/April 2010 - Privatizing Codelco
Latin Finance - March/April 2010 - Samurai Bonds
Latin Finance - March/April 2010 - 36
Latin Finance - March/April 2010 - 37
Latin Finance - March/April 2010 - 38
Latin Finance - March/April 2010 - 39
Latin Finance - March/April 2010 - Peruvian Rail Investment
Latin Finance - March/April 2010 - 41
Latin Finance - March/April 2010 - 42
Latin Finance - March/April 2010 - Brazil Investor Report
Latin Finance - March/April 2010 - 44
Latin Finance - March/April 2010 - 45
Latin Finance - March/April 2010 - 46
Latin Finance - March/April 2010 - 47
Latin Finance - March/April 2010 - 48
Latin Finance - March/April 2010 - 49
Latin Finance - March/April 2010 - 50
Latin Finance - March/April 2010 - 51
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Latin Finance - March/April 2010 - 75
Latin Finance - March/April 2010 - 76
Latin Finance - March/April 2010 - 77
Latin Finance - March/April 2010 - 78
Latin Finance - March/April 2010 - Parting Shot
Latin Finance - March/April 2010 - 80
Latin Finance - March/April 2010 - Cover3
Latin Finance - March/April 2010 - Cover4
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