Only the fourth private credit ever extended to a Brazilian state – Milbank has handled three of them, valued at $1.9 billion; Marcelo Mottesi, head of Milbank’s Securities group, led the deal
In its latest major financing transaction on behalf of a Brazilian state, Milbank, Tweed, Hadley & McCloy LLP acted as special US counsel to Bank of America in providing a credit and guaranty agreement for US$662 million to the state of Maranhão, with a guarantee by the Brazilian federal government.
Maranhão will use proceeds of the 10-year loan to repay outstanding debt owed to the central government. The securitized loan is scheduled to be assigned to a trust, which will issue notes to investors, backed by the credit agreement. The securitization closed on August 1, 2013.
Milbank partner Marcelo Mottesi, head of the firm’s Securities practice and member of the Latin America group, led the deal team, along with associates Matthew Squires and Rodrigo Carvalho. Alternative investments partner Jay Grushkin and associate Mikhel Schecter were also involved.
BofA’s loan to Maranhão is only the fourth private credit ever entered into by a Brazilian state, with Milbank having advised on three of them, including a $726 million loan to Santa Catarina in December 2012 and a $479 million loan to Mato Grosso in September 2012; the three deals account for nearly $1.9 billion in state credits in Brazil over the past two years.
Maranhão is located on Brazil’s northeast coast, extending inward to mountainous jungle areas. Its capital city São Luís is a UNESCO World Heritage site. One of the country’s least developed states, its primary export is a light vegetable oil derived from palm trees, which are emblematic of the region.
“We are very happy to have once again worked with Bank of America in providing a milestone state credit in Brazil, where local economies are eager for capital,” Mr. Mottesi said. “The large loan agreements we’ve helped structure in Santa Catarina, Mato Grosso and now Maranhão are extremely important in advancing Brazil’s regional development. Along with our extensive finance and corporate work in Brazil, these state financing transactions illustrate Milbank’s full engagement in Brazil’s public and private sectors.”
Milbank’s co-counsel advising Bank of America on Brazilian law was Machado, Meyer, Sendacz, Opice Advogados. Arnold & Porter joined local counsel in representing the Brazilian federal government and the state government of Maranhão.
About Milbank
Milbank, Tweed, Hadley & McCloy LLP is a leading international law firm providing innovative legal solutions to clients throughout the world for more than 140 years. Milbank is headquartered in New York and has offices in Beijing, Frankfurt, Hong Kong, London, Los Angeles, Munich, São Paulo, Singapore, Tokyo and Washington, DC.
Milbank’s Latin America Practice Group is one of the most successful and diverse in the region. The group’s attorneys have advised clients on some of the largest and most innovative transactions across the Americas. Attorneys in the group specialize in securities, M&A, project finance, private placements, litigation & arbitration.
