Pinheiro Neto and TozziniFreire in issuance of Planeta Securitizadora

Pinheiro Neto Advogados acted as special Brazilian counsel to Planeta Securitizadora (issuer), and to the advisors and structuring entities Sustainable Investment Management (SIM) and Traive in the first Green CRA Issuance denominated in US dollars (US$) registered outside Brazil, under the US$ 11 million Responsible Commodities Facility (RCF) to finance farmers in Brazil who commit to deforestation and conversion-free (DCF) soy cultivation.

TozziniFreire Advogados also acted in the transaction as special Brazilian counsel to the UK supermarkets Tesco and Sainsbury’s. Waitrose & Partners were also investors of the Green CRA.

The initiative is financed through a first-of-its-kind approach: dollar-denominated green bonds (Green CRAs – Agribusiness Receivables Certificates) registered in the Vienna Bourse, Austria. The capital raised will be used to offer low-interest loans to farmers who comply with its eligibility criteria, and commit to zero deforestation of native vegetation, over and above their legal reserves, preventing negative climate impacts and loss of habitat. The transaction was coordinated by Sustainable Investment Management (SIM), Planeta Securitizadora (Issuer), and Traive.

The RCF will provide finance to 36 farms in the Cerrado region of Brazil, producing 75,000 tons of soy per year (for four years), resulting in the conservation of around 11,000 ha of native vegetation, 4,200 in excess of legal reserves.

The Cerrado, which lies mostly in Brazil, is the world’s most biodiverse savanna, and it is under threat from high levels of deforestation, mostly driven by the expansion of soy cultivation. All farms in the trial stage will be located in the Matopiba, Goiás and Mato Grosso regions, areas at risk of deforestation and biodiversity loss.

After an initial 12-month trial phase, it is expected that the Responsible Commodities Facility (RCF) will be scaled up to include hundreds of farmers across Brazil, helping to protect vast tracts of native Cerrado vegetation in Brazil conserving biodiversity, water quality and carbon stocks.

An independent Environmental Committee composed of the UN Environment Programme (UNEP), The Nature Conservancy (TNC), BVRio, WWF, Conservation International (Brazil), Proforest and Instituto de Pesquisa Ambiental da Amazonia (IPAM) will review and provide input into the environmental management of the facility. The RCF is run by Sustainable Investment Management Ltd (SIM), a signatory of the IFACC initiative (Innovative Finance for Amazon, Cerrado and Chaco), and complies with the IFACC Environmental and Social requirements. IFACC is an initiative led by TNC, the Tropical Forest Alliance (TFA) and UNEP to accelerate the flow of finance to producers in the region and to expand production of beef and soy without further clearing of forests and native vegetation.

Along with those contributing financially to the first programme, which also includes sponsorship from US cocoa and chocolate product manufacturer Barry Callebaut, many more major international soy buyers participated in the design of the RCF.

Pinheiro Neto Advogados was Brazilian counsel to Planeta Securitizadora (issuer) and Sustainable Investment Management – SIM and Traive Finance (advisors and structuring entities). The firm relied on partners Tiago A. D. Themudo Lessa (pictured left) and Rafael Gaspar and associates Renata Gaspar Barbosa Correa and Carolina Fernández Vidal.

TozziniFreire Advogados advised Tesco Corporate Treasury Services Plc and Sainsbury’s Supermarket and relied on partner Alexei Bonamin (pictured right) and associates Bianca Peuker and Leonardo Braghetto.

Clifford Chance was international counsel to issuer and advisors and structuring entities.