Last June, Brazilian infrastructure and logistics giant CCR Group closed a R$10.75 billion ($1.97 billion) financing package for one of the busiest and most important roads in the country which links the major port of Santos to the metropolises of São Paulo and Rio de Janeiro.
The financing for the Rio-Sao Paulo highway concession represented the largest ever road financing transaction in the country – but it was far from the most traditional one. The bulk of the financing took the form of ten series of local currency bonds, or debentures, for R$9.4 billion ($1.7 billion) – the largest such issuance ever carried out in the domestic capital market.
The debentures were fully subscribed by national development bank BNDES. With that structure in place, CCR was able to push the maturity out 23 years – unprecedented in a market used to short tenors. Waldo Perez, the company’s vice president of finance, says this way was critical, but wouldn’t have happened without BNDES’ participation.
“Traditionally the market will take debentures of up to 12 to 15 years. We managed to issue 18-years debentures for our metro concession in São Paulo, but moving from 18 to 20 years is a real challenge,” he says. “Reaching 23 years was key because we were then able to match the payment of the debt with the cash flow of the project itself.”
Luciana Costa, Managing Director – Infrastructure, Energy Transition and Climate Change at BNDES, says: “This transaction is an example of the historic role of BNDES supporting Brazil’s infrastructure investment, particularly in the toll road space, combined with an innovative limited recourse capital markets financing structure.”
The debentures include a R$500 million series that is the first transition green bond issued in Brazil. Another innovative feature is that the two final series will have a slightly higher cost, if sold to BNDES, but CCR can try and sell them in the open market if conditions prove more favorable.
“This transaction is an example of the historic role of BNDES supporting Brazil’s infrastructure investment, particularly in the toll road space, combined with an innovative limited recourse capital markets financing structure”
Luciana Costa, Managing Director infrastructure, energy transition and climate change, BNDES
The project financing was backed mainly by real guarantees linked to the concession.
“We obtained a package of guarantees that is more favourable to CCR than in other kinds of funding,” Perez says. “It is something in which we have evolved, and we will keep trying to get to the levels found in international markets, where projects provide their own guarantees.”
The final part of the financing was a R$1.43 billion loan from BNDES via special credit line and bank guarantees to the tune of R$3.35 billion.
Perez says the deal structure is replicable for other Brazilian infrastructure financings, especially as a spate of road concessions are expected to hit the market in the coming months. CCR itself is already working on the financial package for Rota Sorocabana, another São Paulo-based toll road for which it won a public tender at the end of October.
“Our strategic plan contemplates continuous growth of our business until 2035. To meet that goal, we need to be constantly bringing new assets into our portfolio,” Perez says.
In 2024 alone, CCR invested between R$7 billion and R$8 billion in its infrastructure concessions. To maintain this pace, the company is likely to keep tapping capital markets, especially locally.
Coordinator: BNDES
Issuer’s Counsel: Tauil & Chequer Advogados (in association with Mayer Brown)
Borrower’s Counsel: Machado Meyer
Banks’ Counsel: Machado Meyer
Financial Advisor: Itaú BBA; Santander
Lender: BNDES
Technical Consultant: ALG
Transport & Infrastructure Second Party Opinion: DNV
All supporting financial institutions and law firms were transmitted to LatinFinance by the award category winners. For updates please email awards@latinfinance.com