Banco Santander Brazil IPO Raises $8 Billion

123jump.com Staff
07 Oct, 2009
New York City

Banco Santander priced its offering of its Brazilian unit at the mid-range of its filing range. The largest public offering ever in Brazil raised $8.05 billion. The bank plans to open 600 branches and improve its capital ratio.

[R]6:00 PM New York – Banco Santander priced its offering of its Brazilian unit at the mid-range of its filing range. The largest public offering ever in Brazil raised $8.05 billion. The bank plans to open 600 branches and improve its capital ratio.[/R]

Banco Santander based in Spain priced its Brazilian unit in Sao Paolo that will trade in New York as well. The largest initial public offering to date in the year in Brazil and in New York raised just over $8 billion.

The third largest Brazilian bank sold 600 million units priced each at 23.50 reais, higher than 525 million units it planned to sell. The each unit includes 55 common shares and 50 preferred shares and were filed to price between 22 reais and 25 reais and the units that are expected to trade in New York were priced at $13.50.

The bank plans to use the $6.8 billion of net proceeds to fund its expansion of branch network in Brazil and also improve its required capital ratio.

Banco Santander (Brasil) SA trades under symbol BSBR in New York and SANB11 in Sao Paolo.

In its first day of trading in Sao Polo, Santander fell 3.7% to 22.63 reais and its parent in Madrid trading declined 1%.

The public offering of the bank is the largest ever public offering in Brazil and the bank in the first half ending in June generated $1.25 billion of profit on $5.5 billion of net interest income.

The largest public offering in Brazil was preceded by the listing of Visa payment processor VisaNet or Cia. Brasileira de Meois de Pagamento which raised 8.4 billion reais.

The offering is fully priced and values the Brazil based bank at 34.2 billion euros ahead of Deutsche Bank in Germany and Societe Generale and Credit Agricole in France.

The offering is fully priced to take advantage of market strength in Brazil. The main index Bovespa has surged more than 65% in the year and the bank is priced at more than three times its tangible book value.