Aracruz Restructures Derivative Debt

Aracruz has restructured $2.6bn in debt, most of which was related to FX derivatives, says the Brazilian paper and pulp producer. Some $2.1bn in derivatives related debt and $500m in trade-related loans was termed out to 9 years with spreads starting at Libor plus 350bp and stepping up to Libor plus 600bp, say bankers close to the process. The average rate of the total $2.6bn debt pile is Libor plus 460bp. Calyon, JPMorgan, Citi, Deutsche Bank, Santander-ABN and HSBC are among the banks involved in the debt renegotiations, according to Aracruz’s advisors. Itau BBA also held a smaller portion of the liabilities. Aracruz tapped local boutique Estater, the same shop that advised Votorantim on the acquisition of its stake in Aracruz, for advice on the loan restructuring talks.