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Clifford Chance advises Banco Santander on innovative financing of Brazilian highway development project

17 November 2014

Clifford Chance advises Banco Santander on innovative financing of Brazilian highway development project

SÃO PAULO, Brazil, November 13, 2014 — Clifford Chance has advised Banco Santander, as lender, on a US$300 million credit facility extended to the State of São Paulo to support the São Paulo State Sustainable Transport Project. The financing is guaranteed by the Federative Republic of Brazil and by the World Bank's Multilateral Investment Guarantee Agency (MIGA). The project seeks to build and upgrade approximately 370 km of road across 12 highways that pass through 26 cities. The loan agreement was signed by São Paulo's governor, Geraldo Alckmin, on November 11 in New York.

The transaction marks the first time in more than 10 years that the State of São Paulo has obtained a loan in US dollars from a commercial bank. It also represents the first instance in which MIGA has provided a Non-Honoring of a Sovereign Financial Obligation guarantee, regarding the obligations of the State of São Paulo and the Federative Republic of Brazil.

The Clifford Chance team advising Santander on this matter is led by São Paulo banking & finance partner Chris Willott and associate José A. Cobeña. Partner Ana Carolina Barretto and associate Bruna Eduarda Rey of Veirano Advogados provided Brazilian counsel.

"This unique structure, which we expect will be repeated in the Brazilian sovereign lending market, affords the State of São Paulo the benefits of support from the World Bank despite having reached the World Bank's direct lending limit," explained Willott. "We're very grateful for the opportunity to assist Banco Santander in this innovative and potentially trend-setting transaction."

Clifford Chance's Latin America banking & finance practice advises many of the world’s most prominent banks, finance companies and other institutional lenders on inbound and outbound transaction across the region. The group regularly advises clients on syndicated loans, asset-based transactions, project financings, leveraged buyouts, leveraged and acquisition financings, refinancing, restructuring transactions, tender financings and distressed debt and claims trading. Complemented by market-leading European, Middle East and Asian finance practices, the group is also ideally suited to help lenders and borrowers with cross-border matters relating to Latin America. In 2014 — and for the second consecutive year — Chambers and Partners ranked Clifford Chance's Brazil-based international banking and finance practice among the region's best.