Americas: Brazil - Loan Market Finally Takes Off - Brazilian Companies Are Starting To Use Syndicated Loans As Part Of A Toolbox To Create More Stable, Flexible Debt Profiles. John Rumsey Reports.

Banker, The, February, 2007

Byline: JOHN RUMSEY

In 2002, the market for syndicated loans in Brazil was moribund. Deal sizes were pitifully low and shrinking. Last October, Companhia Vale do Rio Doce (CVRD) arranged a two-year syndicated loan to raise $14.6bn for an acquisition and other large Brazilian firms are starting to use syndicated loans as part of a strategy to cheapen debt and lengthen tenors on a massive scale.

Five years ago, syndicated deals in Brazil raised on average $30m-$80m. Deals in 2002 totalled just over $12bn. International banks were almost completely absent from the market and the few participants that had stayed in were very cautious: they would only arrange syndications on a best-efforts basis when the deal was backed, typically with exports. Almost all...

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