Emerging Markets: DR News | Global Finance

Banco do Brasil Establishes OTC-Traded DR Program

By GP

Banco do Brasil, one of the biggest banks in Latin America, has established an American depositary receipt program in the over-the-counter market. It selected BNY Mellon as depositary for the sponsored ADR program.

The Brazilian bank’s common shares trade on the Novo Mercado listing segment of BM&FBovespa, the São Paulo-based stock exchange. The bank set up the ADR program to provide US investors easier access to its shares.

The Level-1 ADRs did not raise any new capital for the government- controlled bank, but CEO Aldemir Bendine told a news conference in São Paulo that the bank might tap the international capital markets in 2010. “We are evaluating a share issue, along with the controlling shareholders, but we have made no decision so far,” he said. “We could hold a primary and secondary offering in Brazil and the US, in the form of ADRs.” A secondary offering would involve shares held by the Brazilian treasury and the national development bank, BNDES. The treasury holds a 65% stake in Banco do Brasil, and BDNES has about a 2.5% stake.

Bendine says Banco do Brasil could seek acquisitions in the US and is also looking at potential targets in other Latin American countries.

Elsewhere in the region, Colombia-based Grupo Nacional de Chocolates, the nation’s largest food-processing conglomerate, selected BNY Mellon as depositary for its ADR program. Besides chocolates, the company’s product line includes cold cuts, biscuits, coffee, ice cream and pasta.