Issuing debt securities in the Brazilian capital market is now standard practice for agribusinesses. But it wasn’t always like this. In the early 2010s even the largest companies in the sector were restricted from accessing this funding.
In this context, we were hired by ACP Bioenergia in 2013 to act as its financial advisor in its first CRA issuance. A CRA is a fixed-income security backed by receivables, and this transaction helped to open the debt capital markets for agricultural producers. It was so successful that CZ has continued to act as ACP’s financial advisor for further issuances in 2021 and 2022, and in M&A transactions. We continue to advise the company in strategic transactions.
CZ Approach
We used our extensive in-house corporate finance expertise on debt raising:
- Detailed credit assessment and deal structuring to create an information memorandum;
- Unique access to global and local funds and banks with appetite to provide finance;
- Explaining client’s credit;
- Negotiation of the terms and conditions of the issuance to best suit our client’s interest;
- Provide CZ’s expertise in the sugar & bioenergy industry to add value in the investors’ roadshows;
- Due diligence coordination, definitive documents negotiation & disbursement.
CZ Solution:
In over 10 years of partnership, CZ has advised ACP on 3 CRA issuances, in 2013 (BRL 40,5 million), 2021 (BRL 68 million) and 2022 (BRL 150 million). These issuances were successfully distributed in the local capital markets at competitive yields, guarantee structure and tenor.
Find below media coverage of the deal (Valor Econômico):
https://valor.globo.com/financas/noticia/2013/02/07/bb-vende-recebiveis-de-agronegocio.ghtml
https://www.canaonline.com.br/conteudo/acp-bioenergia-emite-novos-certificados.html
Client quote…”ACP and CZ have been working in partnership for more than a decade in the most varied types of capital structure operations… CZ’s corporate finance team were fundamental to the success of the strategic transactions concluded by ACP in recent years and will continue to be for the next ones to come.”
Alexandre Cândido, CEO, ACP
Outlook
The access to competitive funding structures in the Brazilian capital markets helped ACP to implement its expansion plan to grow from a single production hub of ~500,000 tonnes of cane per crop in São Paulo state in 2013 to reach 7 production hubs in 5 Brazilian states producing 2.3 million tonnes of sugarcane, 0.6 million bags of soybean and 0.3 million bags of corn in 2022.
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