Trade Financing of the Year: Suzano Papel e Celulose

Trade Financing of the Year: Suzano Papel e Celulose

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When Brazilian pulp and paper producer Suzano Papel e Celulose acquired rival Fibria, the transaction wasn’t only one of the biggest M&A deals in Latin America in 2018, it also created a new leader in the global commodities market.

Although a possible merger of the two companies had been rumored for years, the lead banks moved quickly to secure financing when the deal was announced last March.

In the space of two weeks, BNP Paribas, JPMorgan, Mizuho and Rabobank negotiated the commitment documents and credit agreements and designed the syndication strategy. They also prepared marketing materials.

The first syndication was launched on March 19. About 27 banks were invited to participate on a first come first serve basis. Within days, Suzano executed binding commitments with international institutions for a $6.9 billion senior unsecured bridge facility, priced at 133bp over LIBOR with a tenor up to 36 months.

A second round of financing soon followed that allowed the company to arrange a $2.3 billion export prepayment facility to help finance exports of the two combined companies. It was priced at 175bp over LIBOR with a tenor up to six years.