Equity capital markets: ICA deal wakes Mexican equity market
Euromoney, is part of the Delinian Group, Delinian Limited, 4 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2024
Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Equity capital markets: ICA deal wakes Mexican equity market

More transactions expected soon; Big European demand for ICA deal

Mexico should see further equity issuance in the next two months, following the market’s first deal of the year in July, according to Sebastien Chatel, head of Latin America equity capital markets at Bank of America/Merrill Lynch. "I think in the second half of this year, in September or October, we are likely to see one or two follow-on transactions out of Mexico," he says.

Last month ICA, a Mexican infrastructure developer, successfully reopened the dormant Mexican equity market with a P$2.26 billion ($168 million) follow-on transaction. Merrill Lynch led the deal, which was ICA’s third visit to the equity markets in four years. Despite Mexico’s rough ride through the credit crisis – financial contagion from the US, over-dependence on a volatile oil price and swine flu – the deal received good levels of interest.

The offering was split in two, with 70% sold internationally. European investors bought half of that allocation. The international tranche was three times oversubscribed, while local demand was two-and-half times the amount on offer. Despite this enthusiasm for the transaction, it was priced at a 4.7% discount on the previous day’s share price, a high discount according to other market players.

Gift this article