13 de agosto de 2015 / 17:03 / hace 2 años

Brazil's Caixa unit IPO sparking investor interest -sources

SAO PAULO, Aug 13 (Reuters) - Brazilian state-controlled bank Caixa Econômica Federal’s planned listing of its insurance unit is winning strong interest from investors in early marketing meetings, with some willing to anchor the deal by buying significant stakes, four sources with direct knowledge of the talks said.

Earlier this month, executives at Caixa Econômica and bankers working on the initial public offering of Caixa Seguridade Participações SA met with large investors in New York, London and São Paulo. Investor feedback on the Caixa Seguridade IPO was very positive, the sources said this week.

Topics covered included Caixa Seguridade’s business, the renewal of a partnership with French partner CNP Assurances SA and how Brazil’s current political turmoil may hamper the IPO, said the sources, who requested anonymity since the talks were private.

“There is strong interest for this deal, despite Brazil’s current market upheaval,” the first source said.

Caixa could raise some 10 billion reais ($2.87 billion) from the sale of about 25 percent of the insurer, the sources said, confirming previous reports. Underwriters are working to price the IPO around the third week of October, the sources said.

Proceeds from the offering may help the government narrow its budget deficit as Brazil seeks to stave off a potential loss of its investment-grade rating. Other state-led IPOs, including that of BR Distribuidora SA, the fuel distribution unit of oil company Petróleo Brasilero SA, and reinsurance firm IRB Brasil RE, are also slated for later this year.

In June, the government sponsored the IPO of another, separate Caixa-owed insurance unit, FPC Par Corretora de Seguros SA, which raised 603 million reais.

Under terms of the Caixa Seguridade IPO, the unit would be listed on the Novo Mercado, a segment of the São Paulo Stock Exchange with the strictest corporate governance standards, the sources noted.

VENTURE EXTENSION

France’s CNP controls 51.75 percent of Caixa Seguridade, topping Caixa Econômica’s 48.2 percent stake. Neither company had an immediate comment.

Some investors in New York offered to act as anchors for the IPO, meaning they would be willing to buy large chunks of the offering to ensure its success, the first and second sources noted.

The potential extension of the joint venture between CNP and Caixa Econômica that formed Caixa Seguridade and expires in February 2021 was discussed during the meetings, the sources said.

Executives and bankers laid out potential scenarios for its renewal, but investors showed no significant concern about the issue, according to the first, second and third sources.

CNP and Caixa Econômica are already in renewal talks, but it is too early to determine their outcome, the third source said.

State-controlled Banco do Brasil SA’s investment banking unit is the deal’s top undewriter, followed by UBS AG, the sources said. Banco Bradesco BBI, Itaú BBA SA, Grupo BTG Pactual SA, Goldman Sachs Group Inc, Banco Brasil Plural, Citigroup Inc and Bank of America Merrill Lynch are also working on the offering. ($1 = 3.4764 Brazilian reais) (Additional reporting by Aluísio Alves in São Paulo; Editing by Christian Plumb and Matthew Lewis)

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