Pinheiro Neto counsels Gaia and Basf in public offering

Pinheiro Neto has advised on an issuance that reached over $60 million

Pinheiro Neto Advogados acted as counsel to the issuer (Gaia) and assignor (BASF) in the public offering of the 1st, 2nd and 3rd series of 26th issue of Agribusiness Receivables Certificates – CRA of Gaia Agro Securitizadora S.A., backed by agribusiness receivables originated by BASF S.A. with a series of rural producers and inputs distributors in Brazil. Banco Santander (Brasil) S.A distributed the offering.

This offering is a very innovative agricultural issuance of 2019, given it enabled the participation of inputs distributors in the issuance through a concept named “product on the ground (POG)”, which proves using external audit that inputs distributors sell their inputs to rural producers. The operational due diligence is quite tricky and requires a pretty organized system developed by BASF.

Since the enactment of CVM Instruction 600, on August 2018, it has been quite a challenge to include inputs distributors in CRA issuances, given CVM was restrictive when authorizing such inputs distributors to participate in CRA issuances. The alternative we proposed to the transaction to allow the participation of inputs distributors enabled the increase of the issuance size approximately 70%.

Pinheiro Neto team was led by partner Tiago A. D. Themudo Lessa (pictured), and involved associates Fábio Moretti de Góis and Nina Goldman.