White & Case Advises Senior Lenders on the Non-Recourse Financing of the Largest Public-Private Infrastructure Project Under Construction in Latin America

Global law firm White & Case LLP has advised the senior lenders comprising Brazil's National Bank for Economic and Social Development (BNDES) and a syndicate of ten commercial banks and developmental agencies in connection with the non-recourse senior secured financing for the US$3 billion (R$17 billion) São Paulo Metro Line 6 project in Brazil, the largest PPP project currently under construction in Latin America.

The project consists of the construction, operation and maintenance of a new 15.3-km subway line and 15 new subway stations by Concessionária Linha Universidade S.A., a special purpose company owned by ACCIONA (47 percent), Société Générale (39.7 percent), STOA (12.3 percent) and Transdev (1 percent). Total project costs are approximately US$3 billion (R$18 billion), with the project financing package comprising US$1.4 billion (R$7 billion) and the State of São Paulo contributing approximately US$1.7 (R$7.85 billion).

The financing involves a 20-year limited recourse BNDES facility that is supported during the construction period by non-recourse bank guarantees totaling more than US$627 million (R$3.31 billion). The bank guarantees were issued by the syndicate of commercial banks and developmental agencies, including BNP Paribas, Banco Santander, J.P. Morgan, Instituto de Crédito Oficial (ICO), Corporación Andina de Fomento (CAF), SMBC, Intesa, CA-CIB, Bradesco and Banco ABC Brasil. 

This is a pioneering and innovative financing structure that involved a complex set of letters of credit and guarantees under Brazilian, New York, Spanish, French and Italian laws covering a portion of the construction risk and which enabled BNDES to provide its first-ever limited-recourse project financing in local currency for an infrastructure PPP in Brazil. The financing structure is expected to become a precedent in the country that could open the doors for long-term project financing to foreign financiers and investors looking to participate in Brazil's infrastructure sector. 

The multilingual team at White & Case was led by partner Martin Menski (Washington, DC) along with partners Carlos Viana (Miami) and John Anderson (São Paulo) supported by teams in Madrid, Paris and Milan including partners Fernando Navarro (Madrid), Iacopo Canino (Milan), partner of counsel Paule Biensan (Paris), counsel Nicholas Macheras (Paris) and associates Evelyn Balassiano (New York), Bruna Beloso, João Villa (São Paulo), Ahmed Boulahcen (Paris), Alfonso Garcia Freire and Rafael Minguez Velasco (Madrid) and Alessia Sommadossi (Milan).

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