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$582 million B loan, which was part of an IFC organized $680 million ﬁnancing, the multilateral’s largest syndication ever. LF

Infrastructure Law Firm
White & Case

Digging Deeper
hite & Case played a key role in a series of drillship ﬁnancings that will pave the way for further infrastructure ﬁnancings in the bond market, earning it an important spot in this space. A string of oil drillship ﬁnancings have opened the possibility that projects bonds in Latin America can eventually take o and cover some of the region’s massive infrastructure needs. The ﬁrm worked with Odebrecht, which takes home this year’s LatinFinance’s project ﬁnancing of the year for the $1.5 billion bond supporting its Norbe VIII and IX drillships. Representing the underwriters, it played a key role in structuring that transaction, as well as the similar Atlantic Star and Alaskan Star bond ﬁnancings that would follow. Odebrecht Oil and Gas placed 6.35% 2021 bonds that represented one of the ﬁrst issuances of a project bond in Brazil, and set new thresholds as the largest and longest issuance of this type in Brazil. The transaction involved complex legal issues in Brazil, South Korea, the Cayman Islands, and the United States. The proceeds of the notes issued in November 2010 were used to repay a project ﬁnancing for the nearly-completed ships, chartered under long-term contracts to Petrobras. The deal, with an 8.1-year average life, priced to yield 6.375% and drew $5.5 billion in orders from investors who liked the pickup to Odebrecht bonds and felt comfortable with the project risk. The most important risk mitigants included the fact that the wait rate on the Petrobras contracts is 90% of the day rate, and the insurance covering the vessels’ availability covers a “very large number of

potential problems,” RBS said at the time. Underwriters and lawyers worked more than eight months with investors, rating agencies and the issuer on the structure to make sure all of the risks were covered, bankers on the deal said. Queiroz Galvão Oil and Gas (QG) followed in July 2011 with a $700 million seven-year bond to reﬁnance debt incurred through its Atlantic Star and Alaskan Star drillships, which also have long-term contracts with Petrobras. The 5.25% bond yielded 5.45%, in a deal that was not the blowout Norbe was, but the results were seen as satisfactory enough. The issuer required more than its fair share of credit work at a time when market volatility had left investors particularly cautious. Further positives included an investment-grade rating and a collateral package that carries a ﬁrst priority lien on all the issuer’s tangible assets and project accounts. Also in July, White & Case advised on the ﬁnancing for the Piedra Larga wind farm, in Oaxaca, Mexico. The power project was done under the Comisión Federal de Electricidad’s self-supply scheme, generating electricity to o set all the use by Grupo Bimbo’s Mexican operations. The $155 million loan was the ﬁrst of its type to be ﬁnanced by commercial and development banks, rather than only multilateral banks. LF

Brazil Boutique
Estáter

Creating a Niche
he most recent awards period was not especially active for specialist intermediaries in Brazil, with the big banks taking a very large share of the domestic M&A transactions. But Estáter, founded in 2003 by a group led by Pércio de Souza, has worked on its fair share of deals over the qualifying period. These included a $450 million capitalization for Tecsis, a maker of wind

turbine blades, that brought in investors such as Unipar, Bradesco’s Bradespar investment fund and Estáter’s own investment fund. In December of 2010, it advised Brazilian internet service provider UOL on an expansion that took it into Colombia. UOL spent 720 million reais to buy Diveo Broadband networks. Diveo provides broadband and hosting services in the Brazilian and Colombian markets. The shop also advised Grupo Talent when it was acquired in October 2010 by French PR ﬁrm Publicis Groupe for an estimated $110 million. Estáter’s biggest deal, however, is one that won’t count in the league tables, at least not yet. Long advisor to Grupo Pão de Açúcar (GPA), it worked on GPA’s bid for the Brazilian assets of Carrefour in a controversial three-way battle that took place during the middle of 2011. French retailer Carrefour had hoped to merge its Brazilian assets with GPA to create a €30 billion revenue company. Carrefour’s rival Casino, however, had been increasing its stake in the supermarket operator, and has the ability to gain full control of the retailer this year through an existing purchase agreement with GPA’s chairman Abilio Diniz. The deal collapsed when BNDES withdrew its support after being criticized for interfering too much in the private sector. Casino still planned a takeover as of late 2011, and no matter which company ends up with GPA, a deal this year is sure to generate business for Estáter, which claimed its spot among the major players working on GPA’s 2009 Globex buy and its 2010 merger with Casas Bahia. Cultivating more relationships with large players will be key in the Brazilian market going forward. Competition should only increase further at all ends of the spectrum. For instance, Plural Capital made a move for Banco Modal, estimated at $75 million, which was abandoned on a technicality in November. However, the shop is looking for alternatives, after hiring investment banking veterans and ex-BTG Pactual partners Evandro Pereira and Pedro Guimaraes. LF

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January/February 2012

Latin Finance - January/February 2012

Table of Contents for the Digital Edition of Latin Finance - January/February 2012