International law firm Milbank, Tweed, Hadley & McCloy LLP, led by Global Securities partner Marcelo Mottesi and Alternative Investments partner Jay Grushkin, acted as special US counsel to Bank of America, N.A. as lender under a credit and guaranty agreement in the amount of $479 million, maturing in 2022, to the State of Mato Grosso, with a guaranty by the Federative Republic of Brazil.
This is the first private credit agreement extended to any state in Brazil approved by the Federal Treasury and Federal Senate of Brazil since the Brazilian debt crisis and restructuring of the 1980s and 1990s. The proceeds of the loan were used to repay certain outstanding debt of Mato Grosso owed to Brazil, allowing the state to refinance its debt and access additional sources of liquidity for investments in its infrastructure.
Mato Grosso is the third largest of Brazil’s states, encompassing approximately 903.4 million square kilometers, with a population of some 3.1 million inhabitants; it represents around 1.6% of the total population of Brazil. Mato Grosso is located in Brazil’s central-western region and has historically been a leading producer and exporter of grains and other agricultural products. The State has also begun to experience growth in the manufacturing and services sectors in recent years.
In June and July of 2014, the World Cup will be held in 12 Brazilian cities, including Mato Grosso’s capital city of Cuiabá. In preparation for the World Cup and to expand its basic infrastructure, Mato Grosso is in the process of planning and executing major infrastructure projects including roadways, mass-transport systems, water treatment facilities and related projects.
Mr. Mottesi commented, “We’re extremely pleased to have worked with Bank of America in providing this historic private credit facility to Mato Grosso. The State of Mato Grosso continues to come into its own and is making major strides to advance its entire infrastructure system, which should benefit residents long after the final 2014 World Cup match is played.”
Mr. Grushkin added, “This transaction is another reflection of how fully engaged Milbank is across all aspects of the Brazilian economy. In addition to advising on capital markets and corporate transactions, we’re counseling clients supporting Brazil’s public sector, with our ongoing project finance work and now, with a major credit agreement for the State of Mato Grosso.”
Other Milbank attorneys involved in this transaction included Global Securities associate Matt Squires, Tax partnerAndrew Walker and associate Randy Clark.
