LatinFinance - January/February 2016 - 35

substantial liability management exercise
that included issuing a green bond with
record pricing.
BRF hit the euro market in June 2015
with a €500 million 2022 bond sale,
Latin America's second-ever "green"
debt instrument. Energía Eólica had sold
a similar transaction - the proceeds of
which must be used for environmentally
sustainable operations - in December
2014.
The timing of the issue was impeccable.
In the five days prior to issuance, euroswaps rallied by eight basis points allowing
for BRF to lock in low rates. The Baa3/
BBB/BBB- rated borrower nailed down
a coupon of 2.75%, the lowest ever for a
seven-year bond from a Brazilian issuer.
Bookrunners Bank of America-Merrill
Lynch, BNP Paribas, Citi, Deutsche Bank,
Morgan Stanley and Santander priced
the bond at 225 basis points over midswaps, down from price guidance of 240
basis points and about five basis points
under the sovereign's interpolated curve.
Investors, many of them heard to be
dedicated to environmentally-friendly
financial products, put in orders for
almost 4.5 times the issue size.
BRF used the money raised from the

A

W

A R D

Issuer: BRF
Finance Type/ Size: €500m ($558m)
2022 bond
Supporting Banks: Bank of
America-Merrill Lynch, BNP Paribas,
Citi, Deutsche Bank, Morgan Stanley,
Santander, BNY Mellon
Law Firms: Simpson Thacher,
Machado Meyer, Davis Polk, Pinheiro
Guimarães

bond sale to buy back almost all of its
5.875% 2022 note.
From November 2014 to April 2015,
Brazilian borrowers had been effectively
locked out of the bond market, as delays to
Petrobras' publication of audited financial
results spooked investors. Votorantim
Cimentos and Itaú-Unibanco hit the debt
markets shortly after Petrobras released the
results, while BRF followed soon after - and
just weeks before the European market
shut down over concerns about Greece
leaving the Eurozone.
For the timing of the issue, the rarity
of the green bond structure and the

importance of the refinancing that
followed the issue, BRF wins LatinFinance's
Corporate Liability Management of the
Year. A strong contender for the award was
Oi's €600 million bond issue and €173.72
million one-day switch tender, the first of
its kind in euros from a Latin American
issuer. While the structure of the note
was innovative, Oi still faces a high level of
debt compared to peers in the sector. In
September, the company hired Rothschild
to help improve its debt profile.
In August, Fitch upgraded BRF one
notch, citing improved cash flow -
although that was subsequently cut back
to BBB-, following its downgrade of the
Brazilian sovereign to the same level in
October. However, less than two weeks later
Moody's lifted its ratings on BRF one step to
Baa2, citing the company´s high liquidity,
healthy revenues, and strong management.
Since the liability management exercise,
BRF has engaged in a series of international
acquisitions. In November, it bought Qatar
National Import and Export Company's
frozen food distribution arm for $140
million. A month later, BRF bought Golden
Foods Siam for roughly $360 million
from Malaysian private equity fund Navis
Capital. LF

S
2015

De

ar
als o
f t h e Ye

The partners, associates and the rest of the team at Ramírez Ornelas Abogados are
deeply honored and grateful to LatinFinance for being recognized as a key contributor
in the GEO transaction, which won "Restructuring of the Year." We would like to
express our appreciation of all our clients, especially BBVA Bancomer, Banco Mercantil
del Norte (Banorte) and Prudential Real Estate Investors, for their trust and support
throughout this award-winning transaction.
New York, January 14, 2016.
www.ramirezornelas.com

January/February 2016 - L ATINFINA NCE.COM 35
http://www.ramirezornelas.com http://www.LATINFINANCE.COM
Table of Contents for the Digital Edition of LatinFinance - January/February 2016
