January 27, 2025
Tauil & Chequer Advogados advises EcoRioMinas on a complex BRL 7.9 billion financing transaction
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Tauil & Chequer Advogados in association with Mayer Brown advised EcoRioMinas, a subsidiary of the Ecorodovias group, in a landmark transaction for the Brazilian infrastructure sector. The deal involves a complex structure consisting of BRL 7.3 billion in incentivized debentures and BRL 663 million in direct financing with the Brazilian Development Bank (BNDES).
In addition to the complexities inherent in a project finance structure, the transaction includes backstop tranches (funds available on a discretionary basis), designed to mitigate the project’s funding risk. In line with other recent and innovative transactions in which the firm has participated, disbursements will take place over seven years, until the end of 2031, in accordance with construction progress.
Another innovative aspect of the financing is the classification of a BRL 1 billion portion as “transition debentures,” earmarked for investments aimed at reducing the project’s carbon emissions (including the use of recycled asphalt material and minimizing vegetation suppression). Upon verifying the application of these resources, the company will benefit from a reduced interest rate.
The financing will be allocated to works on the Rio de Janeiro – Governador Valadares highway system (BR-493/RJ, BR-465/RJ, and BR-116/RJ and MG), spanning 726.9 kilometers, serving as a key logistics corridor between southern and northeastern Brazil.
The team responsible for the transaction was led by partner Luis Montes (Banking & Finance) and Carlos Motta (Capital Markets & Securitization), with the participation of associate Camila Spinola (Banking & Finance).
In addition to the complexities inherent in a project finance structure, the transaction includes backstop tranches (funds available on a discretionary basis), designed to mitigate the project’s funding risk. In line with other recent and innovative transactions in which the firm has participated, disbursements will take place over seven years, until the end of 2031, in accordance with construction progress.
Another innovative aspect of the financing is the classification of a BRL 1 billion portion as “transition debentures,” earmarked for investments aimed at reducing the project’s carbon emissions (including the use of recycled asphalt material and minimizing vegetation suppression). Upon verifying the application of these resources, the company will benefit from a reduced interest rate.
The financing will be allocated to works on the Rio de Janeiro – Governador Valadares highway system (BR-493/RJ, BR-465/RJ, and BR-116/RJ and MG), spanning 726.9 kilometers, serving as a key logistics corridor between southern and northeastern Brazil.
The team responsible for the transaction was led by partner Luis Montes (Banking & Finance) and Carlos Motta (Capital Markets & Securitization), with the participation of associate Camila Spinola (Banking & Finance).