NEW YORK, April 30, 2007 – Reflecting the growing prominence of microfinance institutions around the world, Mexico’s top microfinance bank, Banco Compartamos, S.A., Institución de Banco Múltiple (“Compartamos”), sold $466 million of common shares in an initial secondary stock offering on the Mexican Stock Exchange (“BMV”) and internationally through Rule 144A/Regulation S. The international law firm Milbank, Tweed, Hadley & McCloy LLP, led by partners Michael L. Fitzgerald and Taisa Markus, represented Compartamos in structuring and closing the offering, which was 14 times oversubscribed and priced well above the high end of the estimated price range.
Mr. Fitzgerald noted, “This transaction is the ‘first of its kind’ in many ways. It is the first public offering by a microcredit lender in Latin America, the first initial public offering by any Mexican bank, as opposed to a financial group, and one of the first offerings out of Latin America by entities that define themselves by a social mission. Compartamos reaches more than 700,000 poor entrepreneurs in Mexico, 98 percent of whom are women, with loans averaging $300 each. Compartamos’ activities in Mexico benefit its investors, but also benefit its clients in very meaningful, life-altering ways. I am very pleased that Milbank participated in this transaction.”
In addition to New York-based partners Mr. Fitzgerald and Ms. Markus, the Milbank team representing Compartamos included associates Frank Vivero and Pedro Reyes and international attorney Carlos Chavez. Tax advice was provided by partner Bruce Kayle and associate Stacey Mesler.
About the Offering:
Based in Mexico City, Banco Compartamos is a fully-licensed bank that specializes in providing small loans to low-income, primarily female business owners throughout Mexico. The bank listed nearly 30 percent of its shares in a secondary offering at a price of 40 pesos per share worth US $466 million. The selling shareholders consisted of 18 individual shareholders, including the co-founders of Compartamos, as well as Compartamos A.C. (a Mexico-City based non-governmental organization (“NGO”)), ACCION Gateway Fund LLC (a subsidiary of ACCION International, the Boston-based NGO) and the International Finance Corporation (“IFC,” a member of the World Bank Group promoting sustainable private sector investment in developing countries). The offering was underwritten by Credit Suisse internationally and in Mexico by Acciones y Valores Banamex, S.A. de C.V., Casa de Bolsa, Integrante del Grupo Financiero Banamex and Casa de Bolsa Banorte, S.A. de C.V., Grupo Financiero Banorte.
About Banco Compartamos
Established as the first microfinance bank in Mexico in 1990, Banco Compartamos [BMV: COMPART] is the largest in the microfinancing sector. The bank initially operated a non-bank finance company (“sofol”) until it received its banking license in June 2006, and is now the sixth largest bank in Mexico. Compartamos provides working capital loans to low-income microbusiness owners in rural Mexico through a network of 187 branches. Compartamos currently serves more than 700,000 clients, 98 percent of whom are women, throughout the country.
Milbank’s Latin America Practice Group
Milbank’s Latin America Practice Group has played a prominent role in some of the region’s most innovative and complex transactions, including securities offerings, M&A, project financings and restructurings. Milbank’s Latin America Practice Group is renowned for its leadership in sophisticated cross-border transactions and combines both the transactional and regulatory expertise necessary to successfully negotiate and close innovative securities offerings and other transactions across a wide range of industries.
Milbank’s Latin America Practice Group has been involved in a number of “first of its kind” transactions in Latin America. Recent notable engagements in the past several months include:
- 3 billion pesos Controladora Comercical Mexicana (“CCM”) EuroPeso Note Offering: Milbank represented lead manager Merrill Lynch in leading Mexican retailer CCM’s high-yield offering. Only the third europeso offering in Mexico to date, this financing structure is expected to become increasingly popular since it allows Mexican companies to borrow in pesos and US investors to be paid in dollars.
- $217 Million Grupo Simec Offering: Milbank represented the underwriter Citigroup Global Markets in North American steel maker Grupo Simec’s concurrent offering of shares in Mexico and ADSs in global markets. This is the first SEC registered equity offering out of Mexico in 2007.
- $6 billion CVRD Pre-Export Financing: Milbank represented metals & mining company Companhia Vale do Rio Doce (“CVRD”) and CVRD International in a $6 billion pre-export financing. The financing, unprecedented in size, underscored the market strength of CVRD and the successful strategy of positioning the company as a global borrower.
- $1 billion Vitro High Yield Offering: Milbank represented Mexican glass manufacturer Vitro, S.A.B. de C.V. in a $1 billion high-yield offering, the largest Latin American high yield offering ever. The proceeds of the offering were used to complete the company’s restructuring.
- $650 million Satmex Restructuring: Milbank represented Satélites Mexicanos, S.A. de C.V. (“Satmex”), Mexico’s leading satellite service provider, in its complex
cross-border restructuring. The innovative, comprehensive restructuring process took several years to complete due to its cross-border nature (Mexican company with US debt and equity holders), equity structure (23% owned by the Mexican Government) and a reliance on concessions from the Mexican Government and Mexican regulators for the continued operation of its business. Satmex was named 2006 “Restructuring Deal of the Year” by Latin Finance Magazine. - $200 Million IUSA Offering: Milbank represented Industrias Unidas, S.A. de C.V. (“IUSA”), one of the largest conglomerates in Mexico, in its inaugural US high-yield securities offering.
- $600 Million Banorte Offering: Milbank represented Banco Mercantile del Norte S.A. (“Banorte”), the largest non-foreign owned bank in Mexico, in its issuance of $600 million of “Tier I” and “Tier II” capital securities in the international capital markets. The offering marks the largest capital securities offering ever by a Mexican bank.
About Milbank
Milbank, Tweed, Hadley & McCloy LLP is a preeminent global law firm that for more than 140 years has provided innovative legal solutions in many of the world’s largest, most complex, “first-ever” corporate transactions and litigation. Our transactional expertise includes capital markets, corporate finance and transactions, project finance, acquisition finance, and other major fields of law practice. Milbank litigation teams resolve disputes involving mergers and acquisitions, proxy battles, financings and securities offerings, intellectual property, white collar crime, and corporate restructurings, among others. Our clients range from prominent multinational financial, industrial and commercial enterprises to governments, institutions and individuals. The firm is headquartered in New York with offices in Beijing, Frankfurt, Hong Kong, London, Los Angeles, Munich, Singapore, Tokyo, and Washington, DC.