Housing

Brazilian Homebuilder IPO: Gafisa SA (GFA)

Gafisa SA, a Brazilian homebuilder, has filed for an IPO in the United States.  Since it already trades on the Sao Paulo Stock Exchnage in Brazil, this isn’t exactly a 100% true IPO.  The company listed up to $774.31 million in securities for filing purposes.

It plans to trade on the NYSE under ticker symbol “GFA/ADR” and the lead underwriters were listed as Merrill Lynch, Banco Itau BBA and Citigroup. The company has key shareholders GP Investimentos and Equity International Properties.

The issue that IPO traders are going to potentially have even though this is within the BRIC (Brazil, Russia, India, China) model, the stock is still a homebuilder.  Brazil is a different market than the US and that isn’t arguable, but with the implosion of sub-prime mortgages falling out into the rest of homebuilder sector.  The timing on this one is a bit off and the fact that it has already been trading will usually take away any instant-IPO price jumps.

More can be found on their website at http://www.gafisa.com.br, Jon C. Ogg, February 23, 2007