Issuers eye equity market
After the Fed paved the way for LatAm’s debt borrowers, equity issuers including Avianca, Geopark and Tupy are preparing potential trasactions. Satisfying investors will be more challenging than in the DCM, however
Several would-be equity issuers are eager
to capitalize on the improved market sentiment seen last week.
A surprise delay in the tapering of QE lifted currencies and
equity indexes and brought relief to debt issuers Wednesday.
raised $5.7 billion the following day, and others are now
on the road.
Equity issuers, too, are aiming to get
deals out the door before they need to update their financial numbers. Volaris
priced an IPO last week, which has traded up more than 12%
as of Friday's close.
Fellow airline Avianca has
made its follow-on plans official and has been sounding out
investors. The Colombian's sale would be the first offering of
ADS of Avianca Holdings.
In Brazil, Iron parts manufacturer Tupy is
expected to launch a
follow-on offering. IPOs from
transportation management specialist Sascar and educators
Anima Educação and
Ser Educacional could follow. Larger follow-ons, like Tupy,
may find it easier to price than smaller debutants, based on
the experiences of Brazilian issuers in the last few years.
In Chile Geopark is
readying an IPO and Peruvian holdco Enfoca is also
preparing for a possible debut. Mexicans Grupo Lala and
Grupo Interacciones have added their names to the pipeline,
joining hotel operator
Despite the optimism from last week,
volatility still remains the main challenge for issuers. Equity
markets soared initially after the Fed's announcement, but have
dipped since. The Bovespa and Mexican IPC each posted a loss
Thursday and Friday after rallying Wednesday.