Shearman & Sterling LLP in Washington, DC, New York and São Paulo, Conyers Dill & Pearman in the Cayman Islands and Mattos Filho, Veiga Filho, Marrey Jr e Quiroga Advogados in São Paulo have helped PagSeguro become the first Brazilian fintech provider to list its shares on the New York Stock Exchange following a massive US$2.6 billion IPO.
The underwriters relied on Davis Polk & Wardwell LLP in New York and São Paulo and Pinheiro Neto Advogados in São Paulo.
PagSeguro priced its shares at US$21.50 per share, which was above its original price range ceiling of US$20.50. The IPO included an overallotment option exercised by the underwriters, which allowed them to increase the offering by 35% through the sale of additional shares. Reports suggest the IPO was 10 times oversubscribed. Pricing occurred on 23 January.
PagSeguro provides online and mobile payment solutions to digital and offline businesses targeting consumers in Brazil. It is the first Brazilian fintech company to list its shares on the New York Stock Exchange. The offering is also the largest IPO made by a South American company since insurance company BB Seguridade raised US$4.2 billion in 2011.
The deal reflects growing investor confidence in the Brazilian economy, despite credit ratings agency Standard & Poor's downgrading the country's credit rating from BB to BB- earlier this month. Brazil's year-on-year GDP growth rose by 1.4% in the third quarter of 2017. The Temer administration has been successfully tackling the country's budget deficit, which totalled around US$9.8 billion at the end of the year – down from US$49 billion at the end of 2016.
However, some of Temer's deficit-cutting measures have proved deeply unpopular. A fiercely debated pension reform will be voted on by congress in March. The reform is expected to reduce the country's deficit significantly and is popular with business leaders, but faces staunch opposition from workers' unions. The bill proposes controversial amendments to the current pension scheme, including raising the minimum retirement age.
Counsel to PagSeguro
Shearman & Sterling LLP
Counsel Jeffrey Tate and associate Azeka Abramoff in Washington, DC; associates Yizhou (Jo) Xu and Diana Balassiano in New York; and partners Robert Ellison, Jonathan Kellner and Nathan Greene, and associates Samantha Glover, Mariana Pacini, Filipe Lima and Fernanda Iacia in São Paulo
Conyers Dill & Pearman
Partners Martin Lane and Richard Fear, and associates James Denham and Ryan McConvey in Cayman Islands
Mattos Filho, Veiga Filho, Marrey Jr e Quiroga Advogados
Partners João Ricardo de Azevedo Ribeiro and Vanessa Fiusa, and associates Ralff Barilli and Henrique Ferreira Antunes in São Paulo
Counsel to Goldman Sachs, Morgan Stanley, Credit Suisse, Itaú BBA, Deutsche Bank and Bradesco BBI
Davis Polk & Wardwell LLP
Partners Manuel Garciadiaz and Kathleen Ferrell, counsel Marcie Goldstein, and associates Adela Troconis and James Manzione in New York; and associates Konstantinos Papadopoulos and Lourenço Lopes-Sabino in São Paulo
Pinheiro Neto Advogados
Partners Fernando Zorzo and Guilherme Sampaio Monteiro, and associates Cristina Liu and Luiz Felipe Vaz Guimarães in São Paulo
*This story was updated on 01/02/2017 to add counsel to PagSeguro.