October 2009
In the first three weeks of October, Arnold & Porter LLP has advised on four major capital markets transactions for sovereign and financial institution clients, for a combined total of approximately US$7.4 billion. The most recent transaction was for the Republic of Colombia on October 20, 2009, when the sovereign issued US$1 billion of Global Bonds due 2041. One week earlier, the firm advised the Bolivarian Republic of Venezuela, a longstanding client, on a significant transaction of approximately US$5 billion. In early October, the firm advised on a US$1.275 billion bond sale by the Federative Republic of Brazil and a US$120 million offering by the Caribbean Development Bank.
Colombia's issuance carried a coupon of 6.125%, yielding 200 basis points over comparable US Treasuries, or 6.15%. Mark Stumpf, partner at Arnold & Porter who advised on the transaction, said: "The global bonds represent the lowest coupon and the longest maturity Colombia has ever sold on its dollar debt." Goldman Sachs and Banc of America Merrill Lynch were the underwriters of the offering.
On October 13, 2009, Venezuela issued approximately US$2.5 billion aggregate principal amount of its 7.75% Bonds due 2019 and an additional approximately US$2.5 billion aggregate principal amount of its 8.25% Bonds due 2024.The issue by Venezuela was the country's first international bond issue since May 2008. Citigroup Global Markets Limited and Deutsche Bank Securities Inc. were the dealer managers on the transaction.
Brazil's issue of its 5.625% Global Bonds due 2041 was that country's first offering since getting its third "investment grade" rating, the most recent from Moody's on September 22, 2009. "This issue should open up the 30-year market for other high grade Latin American issuers with strong liquidity," said Gregory Harrington, partner at Arnold & Porter who advised the Republic. "This is a solid indicator about the strength of the Brazilian economy and the quality of its economic team." HSBC and Barclays arranged the offering.
At the same time, the Caribbean Development Bank (CDB), a AAA-rated multilateral development bank headquartered in Barbados and owned by its 26 member countries, issued US$120 million of floating rate notes, maturing in 2012. UBS arranged the offering for the CDB. This was the first international bonds issue by the CDB since 2004, and the CDB plans to use the proceeds to finance its ongoing lending programs to its 18 borrowing member countries in the Caribbean. Raul Herrera, partner at Arnold & Porter who led the financing, stated: "The pricing of this bond issue and the strength of its demand demonstrate the market's appetite for offerings from a financially sound and well managed multilateral institution such as the Caribbean Development Bank. It also underscores the importance of the Bank to further the economic development of the Caribbean region."
Arnold & Porter LLP is a leader in structuring and advising on international corporate and financing transactions in Latin America and the Caribbean, and has advised on numerous securities transactions in the region this year. At the same time, Arnold & Porter LLP is recognized as one of the world's leading law firms in the representation of sovereigns in their international financial affairs.