Brazil's Raizen closes upsized US$725m loan

jueves 2 de abril de 2015 12:37 GYT
 

By Paul Kilby

NEW YORK, April 2 (IFR) - Brazil's Raizen has closed an upsized US$725m dual-tranche loan, bringing in a total 13 banks into the syndication.

The deal from the ethanol producer, which is rated Baa3/BBB/BBB, comes at a time when bond markets have been firmly shut to issuers from Brazil - a country that has been tainted by flagging economic growth and a corruption scandal at state-controlled oil company Petrobras.

The loan market has been somewhat more forgiving at least for high-grade names that have been untouched by a widening kick-back investigation.

Iron ore producer Vale, for instance, is preparing a return to the bank market as it seeks to refinance a US$3bn revolver.

While many investors have taken a hands-off approach to the sugar and ethanol sector, Raizen has the advantage of being investment grade and enjoying strong sponsorship from Shell - one of the company's joint venture partners.

"You really need to have an investment grade rating to come out in Brazil's loan market," said a banker.

At a margin of 120bp over Libor on a US$450m five-year term loan and a US$275m revolver of the same tenor, Raizen was even able to achieve tighter pricing than when it last came to market in April last year. At that time, it closed an upsized US$600m five-year term loan at Libor plus 140bp.

On this occasion, Bank of America, BNP Paribas, Credit Agricole and Scotiabank acted as joint lead arrangers and bookrunners, with Societe Generale and Sumitomo coming in as senior MLAs.

MLAs were Citigroup and Bank of Tokyo Mitsubishi, while ING, Mizuho and HSBC acted as managers. JP Morgan and Santander acted as participants. (Reporting By Paul Kilby; Shankar Ramakrishnan)