Deals of the YEar awards
Brazilian markets in 2022 once again provided the venue for some of the most significant and noteworthy transactions in Latin America – despite a sharp market downturn in an election year that also saw the bulk of deal-making effectively grind to a halt.
Against this backdrop, Mattos Filho, which wins the award for Law Firm of the Year – Brazil, carved out its place advising on a number of the country’s highest profile deals.
That list includes a landmark equity deal – a rarity in a year where stock markets almost completely dried up. The São Paulo-based firm advised on the dramatic transaction that saw the effective privatization of Brazilian power utility giant Eletrobras.
Partner Jean Marcel Arakawa says that the “high” degree of complexity of the deal, which won the award for Equity Follow-on Deal of the Year, called for unwavering effort by all parties involved. “Integrating the architecture of a privatization and a public offer was a new challenge that required difficult negotiations,” he says, noting the deal took six months to close.
Mattos Filho also worked on two other outstanding transactions during the awards period, including the merger between Hapvida and GNDI (Domestic M&A Deal of the Year) and the IPO of digital bank Nubank (IPO of the Year), among others. But the high points did not obscure the fact that transaction market activity was a shadow of the prior year.
Partner Vanessa Fiusa says that the pipeline of companies preparing to go to market in 2022 dried up as the year progressed. “Some have delayed their deals, some were still structuring them, but in general they did not go ahead due to the uncertainties in the market,” she says.
One exception to the slump was the local debt market, where issuance volumes came close to the record levels of the prior year in a dynamic partner Bruno Tuca says “illustrated the strength of the local market.”
“International bond markets closed for Brazilian issuers at some point in the year as they became too expensive,” says Tuca. “In Brazil there was a natural increase of demand for fixed income thanks to the rising interest rates, and issuers looked to local markets to raise money.”
The appetite of local investors enabled issuers to place sizeable debentures reaching up to up to R$20 billion with tenors over 10 years, he notes. A significant number of Brazilian issuers over the past year also pivoted for the first time towards ESG-related securities, in line with the global trend.
“We are seeing a growing number of Brazilian companies that show interest for SLB issuance. Demand is picking up as well, and banks are suggesting clients to follow this way,” Tuca says. That, of course, means more work for their legal advisors, who need to make sure, among other things, that issuers understand the full implications of their ESG commitments. LF