The threat of a hike in US interest rates
and subsequent EM selloff has meant a rest for
LatAm’s busy debt capital markets. A heavy equity
pipeline has filled up for the June-July window, with issuers
eager to get out while they can. It is now clear not all will
The poor market conditions, along with an
aggressive valuation and poor news coming out of Brazil, have
derailed the ambitions of Votorantim Cimentos. The unit of the
Votorantim conglomerate had been targeting 8 billion
reais ($3.7 billion) in what might have been the
biggest IPO of the year in the region. The issuer still may
try again later in the year.
Other Brazilians remain in the pipeline,
but have yet to launch.
CPFL Energia, which pulled an IPO attempt last year, is the
largest, and is joined by airline
Azul. Follow-ons from Brazil or anywhere else in the region
still stand a reasonable chance of getting done, bankers say,
especially if issuers are flexible on the pricing.
Klabin are targeting fresh funds.
In Mexico, a follow-on from
OHL Mexico will give the market its first idea of the
viability of follow-ons from large well-established names. The
road operator is targeting 8 billion pesos ($621 million). A $3
billion deal from
Banorte awaits in July, and developer
Vesta is also planning on raising additional funds.
Next week, Inbursa and airport operator
OMA are scheduled to have all-secondary share deals
representing selldowns of CaixaBank and ICA, respectively.
The $230 million
IPO of Hoteles City squeaked by last week, but airline
Volaris could face a tougher battle if poor market
Grana y Montero was still heard planning to launch a
follow-on that would represent the debut of its US ADS.
Investors note much hinged on the news
from Wednesday’s US federal reserve meeting. A
positive tone could help both debt and equity issuers. ECM has
been looking at a potential record year. LatAm equity issuers
raised $19.80 billion from 41 transactions in 2013 through June
14, compared to $8.52 billion from 35 during the corresponding
period in 2012. LF
Market Troubles Claim ECM Victim