Global financial transactions and infrastructure expansion deals increasingly need third-party expertise to tackle the complexities of meeting the requirements of many parties.
Two recent award-winning major projects in Brazil – one focusing on massive infrastructure extension and the other a huge acquisition financing deal – met the stringent requirements of the country's capital markets and those of multilateral investors in relation to the funds raised and deployed. Both used TMF Group as collateral agent to bring them to fruition.
Porto Itapúa, an expanding container port on the north-east coast, needed to extend its yard and quay and increase handling capacity.
The port obtained a BRL 450 million debenture from three parties: the Inter-American Development Bank, acting through IDB Invest, ING Bank and Banco ABC Brasil.
The deal required a collateral package, with TMF Group acting as agent. It liaised with both sides of the table and organised and controlled the securities pledged for the benefit of the lenders to secure full compliance and settlement of the debentures in 2019.
Porto Itapúa is close to finishing the expansion, doubling the size of its yard and extending the quay by almost 200 meters, increasing handling capacity to two million TEUs (Twenty-foot Equivalent Unit) containers a year.
Transportadora de Gas SA (TAG), part of the natural gas unit of Petrobras, operators of Brazil's longest natural gas pipeline network – over 4,500 kms – in the north and northeast regions, decided to sell a massive 90% stake in the pipeline unit. It would be the state-run energy giant's biggest-ever single asset sale.
A consortium of buyers led by Engie, a major stakeholder in the international energy industry, and Canadian pension fund Caisse de Dépôt et Placement du Quebec (CDPQ), offered the winning bid at a staggering $8.6 billion. Funding came from a Brazilian division of Engie (BRL14 billion debenture), while Engie and CDPG arranged another $5.95 billion from 10 lenders.
The transaction and accompanying cross regional debt facilities made this one of the largest acquisition financings in Brazil and one of the largest hybrid acquisition and project financings in South America.
Again, the parties enlisted TMF Group as collateral agent for the deal. Given the jurisdictions involved, with a range of laws protecting the rights of creditors in collateral, the deal would have been complicated to close without a collateral agent.
TMF Group had the boots on the ground and the expertise to act as local collateral agent in all relevant jurisdictions.
These Brazilian deals exemplify how project and infrastructure financing has grown in both complexity and in the number of financing options available, in part because a broader range of investors are becoming involved. Deals have grown in size and in sophistication, necessitating the involvement of third-party experts to ensure they go through smoothly and enable all parties involved to focus on closing the deal.
Every year LatinFinance, a leading media outlet on the financial markets and economies of Latin America and the Caribbean, recognises stand-out transactions and institutions in capital markets in the region with its Project & Infrastructure Finance Awards. TMF Group was involved in two of the winning deals: Port Financing of the Year (Porto Itapúa) and Oil & Gas Financing of the Year (relative to Transportadora).
Global project finance support
Some 7,800 retained experts, working in over 120 wholly-owned offices in more than 80 jurisdictions, make TMF Group extremely well-placed to help meet the on- and offshore servicing demands inherent in long-term project financing.
Continually changing regulations and laws make it difficult for parties involved in project finance to comply with complex local governance and regulatory requirements. Having a partner who knows how to navigate the challenges posed in public and private sectors around the world streamlines the whole process.
TMF Group works with a wide range of players in the project finance market, representing decision-makers from governments, project developers, sponsors, and local and international investors active in infrastructure undertakings.
Because of the Group's ability and capacity to work on every stage of the project lifecycle across many markets, its executives are keenly aware of what is critical to successful administration of project financing from coordinating complex consents and waivers to ensuring comprehensive responses to requests for information.
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