Milbank Closes $360 Million Financing for Leading Brazilian Telecom Operator Telemar Norte Leste, S.A.
Yen Denominated Term Loan Facility Guaranteed by the JBIC
WASHINGTON DC, October 9, 2007 - In the one of the largest corporate based Japanese yen denominated (JPY) syndicated term loan facilities guaranteed by the Japan Bank for International Cooperation (JBIC), Brazilian telecom operator Telemar Norte Leste S.A. has obtained a JPY equivalent $360 million loan. Telemar Norte Leste operates the largest “landline” (fixed telephone) network in Brazil under the brand name “Oi.” The international law firm Milbank, Tweed, Hadley & McCloy LLP, led by partner Glenn S. Gerstell, represented Citibank Japan Ltd. as the Lead Arranger and Administrative Agent in drafting and negotiating the key financing documents.
Commenting on the deal, Mr. Gerstell noted, “Telemar is in the midst of expanding its broadband business – one of the fastest growing segments of its operations – with robust forecasts for internet connectivity in Brazil. This is a very capital intensive endeavor and Telemar was looking for cost-efficient, long-term funding for these massive capital expenditures. Citibank’s solution was a yen-denominated term loan guaranteed by the JBIC. These structures required balancing the needs of the JBIC as guarantor, affording protection to the commercial banks as the parties making the loan, and the borrower’s desire for maximum flexibility. That ‘balancing act’ is an assignment we know how to do well, based on our long experience in Latin American telecom financing.”
In addition to Mr. Gerstell, the Milbank team representing Citibank Japan Ltd. included associates Gavin W. McKeon and Steven J. Driscoll.
Sumitomo Mitsui Banking Corporation served as Co-lead Arranger of the loan, in which five other banks participated. The loan was guaranteed by the JBIC, an agency of the Japanese government, which has an extensive financing program whereby it offers direct loans and issues guarantees to support commercial banks.
Citibank was represented by Milbank as to US law, by Pinheiro Neto Advogados as to Brazilian law and by Anderson Mori & Tomotsune as to Japanese law. Telemar was represented by Clifford Chance as to US law and Mattos Filho Veiga Filho Marrey Jr. e Quiroga Advogados as to Brazilian law. Nagashima Ohno & Tsunematsu provided counsel to JBIC.
About Milbank
Milbank, Tweed, Hadley & McCloy LLP is a preeminent global law firm that is recognized for more than 140 years for providing innovative legal solutions in many of the world’s largest, most complex, “first-ever” corporate transactions, including capital markets, corporate finance, project finance, acquisition finance, and other major fields of law practice. Milbank 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 and Singapore.