Issuers eye equity market

Issuers eye equity market

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. Borrowers 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 Santa Fe.

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. LF