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Bloomberg
Brazil had its best year ever for equity sales, and Bank of America (BofA) Corp made the most of it.
The Wall Street lender is this year’s top equity underwriter in the nation, handling 20.6 billion reais ($4 billion) and leapfrogging Banco Itau BBA and JPMorgan Chase & Co, which took the two top spots in 2019, data compiled by Bloomberg show.
“Back in March when the pandemic hit Brazil, we were very concerned and thought 2020 would be a lost year,†Hans Lin, Bank of America’s co-head of investment banking for Brazil, said in an interview. “But it all came back full-force starting in July, and the pipeline for 2021 is very busy.â€
Latin America’s biggest nation was hit hard by the
Covid-19 outbreak, with 6.7 million confirmed cases and the second-highest death toll
in the world.
To help revive the economy, policy makers slashed the benchmark rate to an all-time low, prompting investors to dump their fixed-income bonds in favor of equities. Corporations, private equity firms and even the Brazilian government took advantage of investors’ newfound appetite for stocks to raise cash.
A total of 154.3 billion reais in equity sales hit the market in 2020, a 47% surge that surpassed the previous record of 153.6 billion reais in 2010, data compiled by Bloomberg show. Total fees for equity underwriting in Brazil increased almost 18% in dollar terms, to $496 million, according to London-based research firm Dealogic.
Bank of America, based in Charlotte, North Carolina, was the lead underwriter on the biggest Latin American initial public offering this year, hospital operator Rede D’Or Sao Luiz SA’s $2.2 billion transaction. It also handled the biggest block trade in Brazil’s history, a $1.6 billion sale of Vale SA shares.
The nation’s development bank is responsible for much of the equity deluge.
BNDES sold a 22 billion-real stake it held in common shares of Petroleo Brasileiro SA at the beginning of the year, one of the biggest equity transactions in Brazil’s history.