US investment firm Pimco is expected to provide financing to Andrade Gutierrez Engenharia of around USD 500m, according to three sources close to the matter.
The Brazilian construction and infrastructure company has been trying to raise around USD 300m to finance the maturity payment for its USD 344m 4% bond, due Monday 30 April.
The approximately USD 500m financing will be guaranteed by certain shares in the Brazilian infrastructure concession company CCR, including a portion of 80m shares that had received a waiver from Bradesco, as they are subject to a negative pledge clause, according to the first source.
As part of the proceeds to be provided by Pimco will be used to repurchase BRL 650m (USD 188.84m) in domestic bonds (debentures) held by Banco do Brasil, the CCR shares currently serving as a guarantee to the debenture will also be part of Pimco’s collateral package, the first source said.
BTG Pactual had already offered a loan to Andrade Gutierrez to repay Banco do Brasil, but the bank is now out of the deal, the first source said.
Andrade Gutierrez owns a total of 300m CCR ordinary shares, or 14.66% of the concession operator’s voting capital. Another part of its CCR position is serving as collateral for a BRL 1.15bn debenture held by Bradesco, as reported.
Pimco and Andrade Gutierrez have been talking for the past two weeks, and Pimco has approved the deal, according to the first source. The discussions have been conducted by Pimco’s team in London, according to the third source. A final agreement regarding the deal is still pending, the second source said.
Pimco has retained Cescom Barrieu as legal advisor while Andrade Gutierrez has been advised by Pinheiro Guimaraes, according to the second source.
A spokesperson for Andrade Gutierrez and an official at Pimco declined to comment.
The 2018 bonds last traded at 91.5 today, according to MarketAxess.
by Aline Lima, Fabiana Lopes and Camila Dias