Equity kickers expand in Brazil

Author: Danielle Myles | Published: 4 Mar 2013

Financing sweeteners are being used in Brazil to encourage local borrowing by inbound investors.

It is hoped that new combinations of equity kickers will make Brazilian funding more attractive to foreign investors, and help counter the effect of high interest rates and low loan leverage ratios.

These structures, plus a welcomed February court ruling clarifying the status of a popular form of secured guarantee, boost broader efforts to diversify funding away from development bank BNDES.

“Financial instruments are becoming very advanced, and mixing debt with equity to create new debt instruments,” said Pinheiro Neto’s José Luiz...