Pinheiro Neto counsels Banco do Brasil on Minerva’s issuance

Pinheiro Neto has advised on a complex negotiation of the $94 million issuance

Pinheiro Neto Advogados were originally hired to counsel Banco do Brasil (“lead coordinator”), JP Morgan, XP Investment Banking and Bradesco BBI (all together, the “coordinators”) in the public offering of the 8th series of the 1st issuance of Agribusiness Receivables Certificates (“CRA”) of ISEC Securitizadora S.A. (“Issuer”), backed by agribusiness receivables by Minerva Foods (at the time, the largest South American beef exporter, holding 21% of the market share) (“debtor”).

Debentures composed the agribusiness receivables, and all proceeds received by the debtor should be directed to its activities and relationships with rural producers and their development.

Besides coordinating and negotiating with several parties a considerable number of agreements, the counselling was challenged with a very condensed schedule, certainly shorter when compared to similar cases, since the debtor needed, without exception, to finalize the deal in 2019. Amidst this scenario, as negotiations progressed and first version agreements had already been filed with the Brazilian Securities and Exchange Commission – CVM. The coordinators, which were initially responsible for guaranteeing pro-rata the entire issuance in case the CRAs were not subscribed and paid-up for, decided, one by one, to drop the transaction (and their respective guaranty as an effect), substantiating their decision on the economic scenario and envisaged profits. Only the lead coordinator remained. Pinheiro Neto had to assist them in a challenging and reconciliatory renegotiation of the deal’s terms, guaranty amounts and applicable procedures.

Fortunately, they were able to work around the clock, to come into terms with the debtor and issuer, adjusting the entire documentation. All of which required the conclusion of debtor’s backup in a record twelve-hour period, as well as led a significant discussion concerning the legal and economic aspects and effects of having different formulas to calculate monetary updates, amortization and returns for the CRAs and debentures.

This deal certainly stands out due to the manifold turnarounds during its short timeframe, including the renegotiation of several critical aspects of the CRAs and debentures, multiple players, and the financial elements that permeated the entire transaction.

Pinheiro Neto team was led by partner Tiago Araújo Dias Themudo Lessa (pictured), and involved associates Rafael Gaspar, Fábio Moretti de Gois, Leonardo Simões Biglia, Vittoria Cervantes de Simoni, and trainees Giovanna Espir, Alice Teixeira de Carvalho Ribeiro da Silva, Emily Coral Fernandez Somenzari, Matheus de Lima Correia, Nicole Rocha, Gabriela Dias Teixeira Zucoloto, Vinicius Gonzaga, and Giovanna Bittencourt Mantesso.