Lobo de Rizzo and Mattos Filho advise on the Sabesp’s financing
Lobo de Rizzo Advogados advised Companhia de Saneamento Básico do Estado de São Paulo (SABESP), Mattos Filho advised IDB Invest, as lender, and the initial purchasers – Goldman Sachs & Co., Itaú BBA USA Securities, and J.P. Morgan Securities on the Sabesp’s financing in the amount of USD 1.5 billion.
The financing comprised a USD 150 million Term Loan A, a USD 850 million Term Loan B1, and a USD 500 million Term Loan B2. A 100% participation in Term Loan B1 and Term Loan B2 was acquired by Nova Securitisation S.à r.l., a securitization company incorporated in the Grand Duchy of Luxembourg (issuer), using the proceeds from the issuance of USD 850 million 5.750% Blue Senior Secured Notes due 2031 and USD 500 million 6.500% Blue Senior Secured Notes due 2036, for an aggregate amount of USD 1.35 billion. The blue bonds were placed in the international capital markets pursuant to Rule 144A and Regulation S of the Securities and Exchange Commission and are listed on the Euro MTF Market of the Luxembourg Stock Exchange.
The relationship between IDB Invest and the issuer, as direct and indirect creditors, respectively, of SABESP, is governed by a Participation Agreement and administered by UMB Bank, which also acts as paying agent, intermediating the transfer of payments received by IDB Invest from SABESP to the issuer for distribution to the noteholders. The notes are secured by a pledge, governed by New York law, over the issuer’s rights, title, and interest (but not its obligations) under the Participation Agreement.
The proceeds of the Loan Agreement will support SABESP’s investment program aimed at accelerating universal access to sewage collection and treatment services throughout the State of São Paulo. The loan extended by IDB Invest enjoys certain tax privileges as a consequence of Brazil being a member country of IDB Invest by having ratified the Agreement Establishing the Inter-American Investment Corporation. This transaction marks the largest blue bond issuance out of Latin America and the first B-Bond to be issued in Brazil.
Lobo de Rizzo Advogados acted in the transaction with the participation of partner Maria Costa Neves Machado (pictured left) and associates Marília do Valle Farias, Maria Massi de Brito, and Thalita Procopio Serpa Leite.
The company also received international advice from Clifford Chance Luxembourg.
Mattos Filho advised the IDB, as lender, and the initial purchasers – Goldman Sachs & Co, Itaú BBA USA Securities, and J.P. Morgan Securities and relied on partners Pablo Sorj (pictured center), Natalia de Santis de Caldas Pires (pictured right), associates Yasmin Tayar, Renê Naimeg.
White & Case also advised the same party.
