The issuance was a securitisation of export receivables owned by CVRD Overseas, which have been and will be generated by export sales of iron ore and pellets by CVRD to customers in the US, Germany, Spain, Italy and South Korea. Interest and principal will be paid quarterly, after a two-year interest only period.
CVRD Finance will use the proceeds from the issuance to purchase the receivables from CVRD Overseas, which will use the funds to service and refinance existing indebtedness, and for general corporate purposes. CVRD irrevocably and unconditionally guaranteed to CVRD Finance the due performance and compliance by CVRD Overseas of all its obligations under the transaction.
MBIA Insurance Corp gave the notes credit enhancement, leading to an AAA rating from Standard & Poor’s Ratings Services. According the rating agency, the underlying rating of the issuance was BBB. This reflects the operating and financial strength of CVRD, which gave the notes a performance guarantee.
This was the fourth issuance under a programme established by CVRD, CVRD Overseas and CVRD Finance in 2000. The company issued US$300 million of notes in the first three series. The current issuance brings the total to US$550 million, leaving approximately US$530 million of notes that may still be issued under the same programme.
The initial purchaser was JP Morgan Securities Inc.
It was advised in Brazil by Machado, Meyer, Sendacz e Opice Advogados, through partner Carlos José Rolim de Mello and associate Daniel de Miranda Facó.
White & Case LLP acted as US counsel to JP Morgan, through partner Victor M Alvarez, and associates Todd D Oretsky and Monica Neuman.
In addition, Lovells acted as special US counsel to JP Morgan, through associate Adam Solowsky.
MBIA took US counsel from Sidley Austin Brown & Wood LLP, through partner Jennifer Janss.
Pinheiro Neto Advogados advised CVRD, through partner Ricardo E Vieira Coelho and associate Laura Helena Pinheiro de Oliveira.
CVRD was advised by its general counsel Pedro Freitas, the head of its corporate legal department, Clóvis Torres, and in-house counsel Larissa de Souza Lima.
Sources: Latin Lawyer Online August./2003
Date of insertion: 15/08/2003 - 16:30:22
