Investment Bank of the Year Chile: JPMorgan
October 31, 2019
By going big, the investment bank is dominating landmark Chilean IPOs
JP Morgan has led five of the six largest initial public offerings in Chile since 2017, with the latest being Cencosud Shopping’s $1.05 billion June offering.
The largest owner and operator of retail malls in Chile floated about 28% of its shopping center division. It was the largest ever offering on the Santiago stock exchange and opened the door for future large-scale IPOs. The deal took time to pull together.
Andrés Errázuriz , executive director of investment banking in Chile for JP Morgan, says the investment banking team spent nine months preparing the offering before taking Cencosud on the road.
Local pension funds ended up buying nearly 60% of the offering, while local financial institutions picked up almost 12%. Foreign investors purchased the rest.
The reception demonstrated the Santiago exchange’s ability to digest such a huge IPO, raising the possibility of more deal activity in the future.
“We can take larger transactions to the market,” says Errázuriz, who expects to see one or two additional IPOs in Chile this year and next.
Another notable deal for JP Morgan was Chile’s euro-denominated green bond in late June.
The bank served as bookrunner, along with Crédit Agricole and Société Générale, for the sovereign €861 million ($979 million) issue. The notes were priced at 0.83%, a new low for a Chilean sovereign eurobond.
Errázuriz says the sovereign green bond has attracted wide attention among possible issuers concerned about climate change. “It’s competitive in terms of rates,” he says. “We believe other companies will be looking at it.”