Milbank Closes $6 Billion Pre-Export Financing for One of the Worlds Largest Metals and Mining Companies
CVRD Deal May Also Be the Largest Latin American Financing of 2007
NEW YORK, February 6, 2007 – Companhia Vale do Rio Doce (“CVRD”), one of the world’s largest metals and mining companies, has closed on a $6 billion pre-export financing to prepay a portion of outstanding debt relating to its 2006 acquisition of Inco Limited (“Inco”). The international law firm Milbank, Tweed, Hadley & McCloy LLP, led by partner Daniel Bartfeld, represented CVRD and CVRD International in what is likely to be the largest Latin American financing transaction of 2007.
The $6 billion financing is the third and largest of three financings being used to prepay the $18 billion bridge loan that CVRD entered into in October 2006 to finance its acquisition of Canadian metals company Inco. Lead arrangers included CSFB, Santander, ABN and UBS.
Privately-held CVRD is based in Brazil, with operations in fourteen Brazilian states and sixteen countries. In October 2006, CVRD acquired 75.66 percent of Inco in a deal valued at US$13.3 billion. CVRD subsequently purchased the remaining Inco shares and now owns 100 percent of the company. As of January 4, 2007, Inco Limited became a wholly-owned subsidiary of CVRD and changed its name to “CVRD Inco Limited.” The acquisition was financed through US$2 billion from CVRD’s cash holdings and a two-year US$15.5 billion bridge loan provided by a syndicate of 37 international banks. New York-based Milbank partner Dan Bartfeld noted, “CVRD’s landmark acquisition of Inco marked the largest ever syndicated loan from the emerging markets as well as one of the most significant cross-border M&A deals of 2006. The $6 billion financing, which is the last of three large financings done to repay the $18 billion bridge loan, shows the market strength of the CVRD credit and the successful strategy of positioning CVRD as a global borrower rather than as a Latin firm. Milbank’s depth of experience in the natural resources and mining sector and our expertise in complex cross-border financings made us well qualified to participate in this stage of the deal.”
Mr. Bartfeld worked with Milbank associate Roland Estevez in negotiating and structuring the financing for CVRD and CVRD International. Hughes Hubbard & Reed LLP represented the lead arrangers.
About Milbank
Milbank, Tweed, Hadley & McCloy LLP is a preeminent global law firm that for more than 140 years has provided innovative legal solutions in many of the world’s largest, most complex, “first-ever” corporate transactions and litigation. Our transactional expertise includes capital markets, corporate finance and transactions, project finance, acquisition finance, and other major fields of law practice. Milbank litigation teams resolve disputes involving mergers and acquisitions, proxy battles, financings and securities offerings, intellectual property, white collar crime, and corporate restructurings, among others. Our clients range from prominent multinational financial, industrial and commercial enterprises to governments, institutions and individuals. The Firm is headquartered in New York, with offices in Los Angeles, Washington, DC, London, Frankfurt, Munich, Tokyo, Hong Kong, Singapore and Beijing.