PPU, Simpson Thacher, and multiple firms act on Arauco’s US$500 million issuance notes
Simpson Thacher represented Chilean forestry company Celulosa Arauco y Constitución (Arauco) in an offering of US$500 million aggregate principal amount of 6.180% Sustainable Notes due 2032. The offering was conducted in reliance upon Rule 144A and Regulation S under the U.S. Securities Act of 1933.
The transaction, closed on May 5, 2025, was structured under the rules of the U.S. and Chilean markets, reflecting the increasing sophistication and global reach of Latin American issuers in the debt capital markets space.
Philippi Prietocarrizosa Ferrero DU & Uría (PPU) advised the banks J.P. Morgan Securities, Santander US Capital Markets and Scotia Capital (USA) and Itaú BBA USA Securities as representatives of the initial purchasers.
Arauco is one of Latin America’s largest forest plantation owners and one of the world’s largest producers of bleached and unbleached softwood kraft pulp, bleached hardwood kraft pulp and wood products in terms of production capacity.
The net proceeds from the sale of these Sustainable Notes are intended for general corporate purposes, which may include the partial financing of the construction of a pulp mill by its subsidiary Arauco Celulose do Brasil in the municipality of Inocência, State of Mato Grosso do Sul, Brazil (known as the Sucuriú Project) and/or the partial repayment of certain of Arauco’s existing indebtedness. Another possibility is to use the proceeds to refinance eligible green projects and eligible social projects.
Philippi Prietocarrizosa Ferrero DU & Uría (PPU) advised the representatives in Chile, with partner Daniel Parodi (pictured left) leading the team, alongside associates Juan Ignacio Rosales, Tomás Canales, Antonia Molina, and Antonio Marinovic.
The Simpson Thacher team included Juan M. Naveira (pictured right), Kirsten L. Davis, Isaac Cattan and Sofia Reizin (Latin America – Capital Markets).
International legal counsel to the lenders was provided by Cravath, Swaine & Moore, with Doug Dolan participating on the deal. Borrower-side counsel also included Portaluppi, Guzmán & Bezanilla as Chilean counsel, with Juan Francisco Guzmán leading the local advisory.
