27 August 2018
Clifford Chance advises IDB and IDB Invest on new guaranty product in Brazil
Clifford Chance's top-rated Project Finance team has advised the Inter-American Development Bank (IDB) and the Inter-American Investment Corporation (IDB Invest) in connection with the first ever issuance by IDB of a Reais-denominated guaranty of Brazilian infrastructure bonds. This innovative offering from IDB leverages its AAA credit rating to promote development financing since, due to the IDB guaranty, the issuer of the Brazilian infrastructure bonds was able to offer its investors a domestic Brazilian investment with a local AAA rating, higher than Brazil's sovereign debt rating. The bond issuance is being used to finance the Santa Vitória do Palmar project, which is a 207 MW portfolio of wind farms and related transmission infrastructure in the state of Rio Grande do Sul, Brazil. The bond offering was nearly five times oversubscribed, reflecting investor interest and excitement in this new product.
Brazilian state development bank BNDES and Brazilian regional development bank BRDE also provided financing for the project, while private equity fund Actis Brasil Energia Fundo de Investimento em Participações Multiestratégia sponsored the project, which is owned by Atlantic Energias Renovaveis S.A. (a company wholly-owned by Actis Brasil).
Clifford Chance Washington, DC-based partner Lori Bean and associate Lauran Smith advised IDB Invest in this transaction and in crafting the new guaranty product that this deal introduced to the market.
Clifford Chance's LatAm team is frequently recognized for developing sophisticated, multisource financings, both through project finance and bond structures and securitization schemes that involve a combination of commercial banks, multilateral lending agencies and the bond markets. As the first international law firm to open an office in São Paulo, Clifford Chance has a decades' long track record of advising on successful and innovative financing structures across the entire Latin American region. The Firm's dedicated Energy & Infrastructure team is comprised of bilingual and culturally fluent lawyers who understand Latin America's distinct business, legal and regulatory landscapes, as well as the evolving needs of a diverse client base. The group regularly works across borders and practices on matters involving project development and the delivery of new finance and capital markets structures.