Banks get their fingers burnt by Tabacalera

Issuer: Tabacalera

Amount: Pta281 billion ($1.9 billion)

Type of deal: secondary equity offering

Launched: April 27

When the four global coordinators for the privatization of the remaining 52% of Spanish tobacco group Tabacalera left the company’s Madrid office on April 20 they were pretty pleased with themselves. They had just negotiated the largest underwriting discount in Spanish privatization history, 13.02% for the two institutional tranches of the sell-off. The banks in the syndicate had agreed to underwrite the sale at Pta3,340 a share.