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| Rodovias do Tiete R$1,065 million project finance debenture | |
| Arranger and global coordinator | BTG Pactual |
| Bookrunners | Banco ABC, Banco Espírito Santo, Banco Safra and Morgan Stanley |
| return to the Deals of the Year 2013 index | |
This deal – led by BTG Pactual after an aborted attempt by Barclays the year before – was the first truly project finance structured bond issued in Brazil. It was also the first debenture to be distributed pursuant to rule 144a/RegS in the international market and the first with a final maturity of 15 years (the previous maximum tenor was 12 years). Despite facing strong volatility and sharp deterioration in market conditions (rise in interest rates, change in Brazil’s rating outlook and the prospect of Fed stimulus tapering), Rodovias do Tiete was able to place fully the R$1.065 billion ($440 million) transaction – facilitated by the firm underwriting commitment provided by the lead and co-bookrunners. The volatility in the markets was of consequence: in the same week BNDESPar and Iguatemi cancelled their debenture and real-estate asset-backed securities (CRI) transactions, respectively.
The deal’s reliance on domestic bids to build a book (the earlier transaction focused on international accounts) also paid off when the Brazilian government withdrew its IOF tax on international investors’ direct holdings of Brazilian fixed income – at a stroke lessening the comparable returns with sovereign bonds from the tax-free proposition of this infrastructure bond.
