Brazil’s CNAA Clinches IDB Funds

CNAA the startup has clinched a 15-year, $269m A loan from the IDB and a commitment to help it raise an additional $379m for three new ethanol plants in south-central Brazil. The A loan will carry a spread of between 300bp-350bp over Libor, says an IDB official, adding an extra 50bp of padding to the targeted 300bp area CNAA’s CFO Jair Steola told LatinFinance he was expecting earlier this year. The B loan will be syndicated by BNP Paribas, and should begin immediately, say bankers close to the process. The financing package for CNAA will also feature a novel sugar hedge that helps it raise lower-cost financing at longer tenors, says Steoloa. The instrument, to be put in place by Goldman Sachs and or BNP Paribas, is designed to reduce the borrower’s exposure to fluctuating sugar prices for up to 5 years, covering 70% of production. The three new plants are being built in the states of Minas Gerais and Goias and will produce up to 420m liters of ethanol for the domestic market each year, adds IDB.