IM Trust might follow Celfin into foreign hands

When Chile’s government set about creating Santiago as a Latin American financial centre, it probably intended to promote its financial institutions as intermediaries of deals rather than as targets.

Peru’s Banco de Crédito is in the process of buying Chilean securities firm IM Trust, according to press reports in the Chilean media. Banco de Crédito is not confirming the reports but neither is it issuing denials and a well-placed source says the deal is progressing.

IM Trust is one of the most active bookrunners on Chilean equity deals and with the country being one of the better-performing Latin American markets last year, the bank managed deals for Esval / Essbio, Cruz Blanca, Aguas Andinas, Grupo Security and AquaChile.

It is less well-known as a debt house but in the past three months has managed domestic debt capital market deals for Grupo Saesa, Interproperties Finance, Banco Falabella and, on Thursday, priced a $92 million-equivalent bond for private medical company Empresas Red Salud.

Should the deal go through, it will likely be the second Chilean local to be bought by Latin American banks with regional aspirations – BTG Pactual’s acquisition of Celfin, which was announced in August, is expected to be completed before the end of the first quarter.

Fees in the domestic Chilean capital markets are extremely small, and at the time of the Celfin announcement some rivals questioned the ability of the Brazilian investment bank to make the acquisition profitable.

However, their business model is based in increasing volumes and positioning itself for more lucrative international issuances from the country, as the large Chilean corporates outgrow their domestic finance base.