CCR Tees up Metro Financing

Brazilian concessionaire CCR is days away from signing a $310m financing package for the first phase of development of Sao Paulo’s Via 4 metro line, say people close to the company. A signing could come as early as Monday, with funding soon after. An IDB A/B loan is being arranged, with Banco Real leading the B portion. A 12-year B loan expected at close to $240m is heard with a margin of around 200bp, while a 15-year A loan from the IDB will cover the difference at a presumably higher margin. Strong interest from at least 6 other non-Brazilian commercial banks may lead to a downsizing of the A portion and an increase in the B, says an executive on the deal. Local giants Itau and Bradesco are not expected to participate. The Linha 4 consortium is made up of CCR (58%), a Banif fund (30%), Mitsui (10%) and operators RATP and BRT, from France and Argentina respectively, each with 1%. Linha 4 will be responsible for providing the trains and operating the metro lines, while the government of Sao Paulo is building most of the infrastructure. In order to bring BRL revenues in line with dollar liabilities, CCR says it will likely conduct periodic rolling hedges, meaning it will every 6 months or so lock in an FX hedge for the following 2-3 year period. “That seems to be the best way to do it,” says the executive, noting that this is more cost efficient than a long term cross currency swap.