Equity: Issuers Follow Petrobras

Nov 1, 2010

With Petrobras’ $70 billion capitalization out of the way, other LatAm equity issuers are cleared for takeoff.

The most optimistic ECM bankers forecast $10 billion getting done in the last quarter. There are even signs of life beyond Brazil.

Firstly, the market is set for continued oil flow, even after an IPO was lost when Repsol sold 40% of its Brazil unit to China’s Sinopec for $7.1 billion. Bank of America Merrill Lynch, Credit Suisse, Itaú and Santander were set to lead a float, seen raising perhaps $4 billion in equity, before the issuer went strategic.

In its place, HRT was expected to raise around 2.5 billion reais from an IPO at the end of October via Credit Suisse, Citi and Goldman Sachs. The Brazilian E&P company should be followed by Karoon Gas Australia, owner of Brazil and Peru oil exploration blocks, spinning off 30%-35% through Morgan Stanley. Valuations of its LatAm assets vary, but the...

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