LLX Subsidiary Raises BRL1.3bn

LLX Logistica subsidiary LLX Minas-Rio says it has executed definitive financing agreements worth BRL1.3bn with BNDES and other financial institutions. The financing has a total amortization schedule of 12 years and a 2.5-year grace period, says the borrower. The transaction was structured as a project finance with a debt/equity ratio of 73%/27%. The ratio is a relatively favorable one for LLX: In Chile, Marubeni and Antofagasta are seeking debt financing for their own 12-year mining project, but have structured it with a 50% debt to equity ratio. The 50% in the case of this project equals around $1bn. From that total amount of BNDES funds LLX is to receive, 50% will be disbursed as a BNDES direct loan, while the other 50% will be on lending by Unibanco and Itau. Funds will be used to enable iron ore handling from Anglo American mines in Minas Gerais. “This financing is positive news for LLX because it reduces the risks regarding development funds for the LLX Minas-Rio Port,” says Itau. Still, the shop sees the stock underperforming the rest of the market in 2009 since investors may demonstrate higher risk aversion to long-term projects.