Between the Cracks: Today’s $2 Billion Brazilian IPO

Did you know that a $10 billion credit-card issuer just went public today?

It’s received precious little news coverage, but a consortium of three banks

in Brazil, including Citigroup, has just sold a

22% stake in Redecard, the Brazilian credit-card network, for $2.15 billion.

The offering was ten times oversubscribed, and the shares priced at 27 Brazilian

reais per share, well above initial guidance.

A $2.15 billion IPO is huge by any standards: the second largest IPO in the

US, over the past 12

months, was Spirit AeroSystems, which raised just $1.43 billion. (The largest,

of course, was Blackstone, at $4.13 billion.) Fortress Investment Group, the

high-profile hedge fund, raised just $634 million.

If nothing else, this shows how far Brazil has come in the past five years

– from an emerging-market basket-case with almost no access to capital

market, to a major economic powerhouse where $2 billion IPOs are almost not

newsworthy outside the country.

Alternatively, it shows how parochial and insular capital markets still are

in this supposedly globalized world of free international capital flows. I’m

sure lots of US money managers have placed orders for Redecard stock. But the

general reaction to the IPO in the press seems to be that it is too far away

to worry about, and not particularly interesting or relevant to a US audience.

That’s what happens, I guess, when you opt not to have a dual listing in New


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