Winner: Mattos Filho
Mattos Filho demonstrated its versatility by participating in some of Brazil’s most ambitious infrastructure deals over past year, including Salvador de Bahia Airport, Gás Natural Açu (GNA) and BRK Ambiental’s wastewater project.
The firm represented the French airport operator Vinci Airports in the BRL517million ($138 million) Salvador de Bahia deal. It was the first time Banco do Nordeste provided airport financing. It was also supported by a syndicate of seven commercial banks.
Partner Pablo Sorj calls the airport deal especially challenging. For starters, Salvador Bahia was Vinci Airports first concession in Brazil. “It’s very unique to have a nonrecourse financing in Brazil with a first-time sponsor,” he says.
What’s more, it was a truly non-recourse financing. “The banks only relied on the project,” says Sorj. “There was no additional sponsorship support for construction cost overruns.”
The BRL4.5 billion GNA project was similarly challenging. “Every LNG power project is complex,” says Sorj. “This is only the second one in Brazil.”
Mattos Filho assisted power generation company UTE GNA I Geração de Energia throughout the negotiations of the financing with the senior lenders, which included export credit agencies the IFC, BNDES and Germany’s KfW-IPEX. Sorj noted it was unusual because KfW took on the construction risk because of the participation of Siemens which provided equipment to the project. “Quite a unique profile with the role of this ECA,” he says.
The BRL1.7 billion BRK Ambiental wastewater infrastructure project was another massive undertaking, the largest sanitation project in Latin America. Beyond its size, the duration also made BRK exceptional, according to partner Bernardo Mocho.
BNB, Caixa and IDB Invest are financing different cycles of the project, which will eventually serve 90% of the 4 million inhabitants in the metropolitan region of Recife in northeastern Brazil. “It’s a continuing capex project so not all the capital is used at first,” says Mocha. “Some of the investment may not be made for five or six years.”
Adding to the complexity: the deal closed after the second round of Brazil’s presidential elections and Caixa’s management changed. “Closing in the midst of a changing administration was a bit challenging,” recalls Mocho.
As for the future, Sorj believes the government’s privatization program will stir more deal activity. “You could see new faces and players in the market,” he says. Mocho adds that the changing priorities of BNDES and other development banks will make room for more alternative local financing.
LATAM OFFICES: São Paulo, Rio de Janeiro and Brasilia
HEAD PARTNERS: Bernardo Mocho, Fabiano Brito, Felipe Feres, Giovani Loss, Marina Anselmo Schneider, Nilton Mattos, Pablo Sorj, Thiago Fernandes Moreira, Thiago Luís Sombra