Latin Finance - November/December 2011 - 45

2011

also plotting a debut o ering in the international capital markets as it looked to take out a bridge loan used for the acquisition of BAC-Credomatic for $1.9 billion through parent company Grupo Aval. Citi, HSBC, and JPMorgan have been award the mandate for an issue that is expected to take place this year. Moody’s has given the potential bond a Baa2 rating. Considered as the bank’s ﬁrst crossborder move, the acquisition of BAC, which was concluded in December 2010, was ﬁnanced with $1.2 billion capital injection in the form of equity-convertible debt converted by the end of March 2011— and by $433 million in cash. The remaining $227 million was sourced through a $1 billion bridge loan from a consortium of international banks, and is expected to be paid via a proposed senior $1bn 10-year bond. “In terms of inorganic growth, Banco de Bogotá under the guidance of Grupo Aval, will analyze opportunities that present themselves and that fall into our strategy of business and that adjust to generate value and growth,” Figueroa adds. LF

The Full Spectrum

activity in Colombia is booming.” Bancolombia advised, along with UBS, Grupo Suramericana on its $3.8 billion purchase of ING’s LatAm assets in July. Its other large advisory deals included Actis’s buyout of two electricity distributors from Gas Natural for $366 million. Opportunities in M&A can be sorted into two main trends, Serani says. The growth of the country’s middle-income sector is creating opportunity for consolidation among consumer-focused companies. Investment in infrastructure is also ripe for M&A activity, particularly oil and mining service providers. “Now with the free-trade agreement [with the US], it is critical that the government accelerates its infrastructure investment plans,” Serani says. Each of the two tendencies will involve local and foreign buyers. After targeting energy in recent years, private equity players like Advent International, which set up a Colombia o ce in October, are expected to start buying in the consumer space over the next three to ﬁve years. Against this backdrop, Serani expects more interest from global banks, including new entrants. Brazil’s BTG Pactual is rumored to be looking for a local acquisition following its entry into Chile with the purchase of Celﬁn, while Japanese lenders are keen to move in as Best Investment Bank - Bancolombia well. It remains to be seen what such incursions might mean for a capital markets landscape where the country’s smaller brokerages still do a lot of the ECM and DCM business. On the ECM side, the global equity shutdown n a landscape of boutique specialists has meant large local deals and more and global powerhouses trying to gain business for such specialist shops, such as ground, the investment banking unit at Corredores Asociados. Colombia’s largest domestic institution Bancolombia topped the DCM table in still has a presence at both ends of the spectrum. The competitive environment is the period with $501 million equivalent already changing, however, with plenty of in volume, according to Dealogic, and room for competition from participants of also leads if managing banks’ own bonds are removed. Its year included deals all sizes. for public utility Empresas Públicas de In the M&A space, a handful of boutiques leverage high-level relationships Medellín and state-controlled oil ﬁrm Ecopetrol. for a couple of large deals each year, Many large Colombian issuers, with the foreign shops also working on including Bancolombia and Suramericana a few. “The market is very active,” says have directed fundraising e orts toward Jean Pierre Serani, managing director the international markets, and more for structured ﬁnance at Bancolombia. “Despite much of the world being in crisis, seem set to follow. With some $45 billion

in pension fund money available, the challenge for Colombia’s local market is to o er the high-quality issuers the size they need domestically, and create space for triple B issuers. LF

Chile
Best Bank – Banco de Chile

Prudent Growth
anco de Chile has taken a lead position by most measurements this year after pushing through an investment plan that has allowed it to expand market share in several important segments. It is now well capitalized for future growth, but is prepared for any possible downturns, says Arturo Tagle, the bank’s general manager. With a $100m investment plan behind it, Banco de Chile has been upgrading technology to improve service and has plans to open 30 new branches this year in addition to the 26 new branches completed in 2010. “This year we hope to grow more than the industry average, which is around 12% in real terms, and expand our presence in the market,” adds Tagle. According to Fitch, as of March 2011, Banco de Chile managed to overtake its rival Santander Chile in terms of proﬁtability. At the time, it boasted an

Colombia

Banco de Chile (million of pesos)
Leading in Proﬁts Total Assets Operating Revenues Net Income* ROAA ROAE** Efﬁciency Ratio 2Q11 20,250,642 326,731 114,025 2.3 26.5 50.2 2Q10 17,688,389 297,976 107,808 2.5 30.0 46.5

* Net income attributable to bank’s owners (adjusted by minority interest) ** ROAE exludes provisions for minimum dividend Source: Banco de Chile

November/December 2011

LATINFINANCE 45

Latin Finance - November/December 2011

Table of Contents for the Digital Edition of Latin Finance - November/December 2011