In late April 2011 Euromoney was in New York in a top-floor office of one of the largest US investment banks. The interview was with a banker responsible for his organization’s Latin American equity capital markets business. Recent deals had been discussed and questions asked about coming transactions, all in a tone that could be described as perfunctory, cordial and equable.
That was, until the name ‘Gerdau’ entered the conversation. The word had an immediate physical effect on the interviewee: stress furrowed his countenance, his arms folded across his body and he pushed his chair back away from the table. Clearly, a nerve had been touched. An emotion close to anger took charge of his answers, his voice louder and higher in tone, delivering vitriolic criticism of the deal’s execution. He argued vehemently that this deal changed nothing.
But it had and it has. The Brazilian steelmaker’s follow-on transaction broke an emerging markets taboo. It was a very large equity deal (R$4,985 million – $3,141 million equivalent using the exchange rate of the deal’s pricing date, April 12) that needed international investor support.
