Brazil Journal by Pedro Arbex - 22/01/2024
By Writing Team
Posted in January 24, 2024
Ambipar started its roadshow today for a green bond issuance of approximately $500 million, marking its debut in the international debt market.
The company will use the proceeds to prepay five debentures maturing between 2024 and 2028, increasing the average maturity of its debt from 3.5 years to 5 years.
The bond will have a 7-year term.
In addition to increasing the duration, the issuance will free up Ambipar’s credit limit with banks, as many of them held the debentures that will be prepaid in their portfolios, and diversify the company’s funding.
“Not everyone can debut in the international market with a green bond,” Caio de Luca, head of DCM at Bank of America, told the Brazil Journal. “This reinforces their ‘true ESG’ nature and the company’s overall governance.”
In Brazil, Ambipar has already issued some green debentures in the past.
Although the proceeds will be used to prepay debts, Ambipar is committed to allocating the same amount to ESG projects within its growth strategy, allowing the debt to be classified as a green bond.
However, the company has not disclosed which projects these will be.
The roadshow began today with Ambipar’s first meeting with international investors ending about an hour ago.
According to Caio, the company will engage with global investors focused on emerging markets but expects particularly strong engagement from ESG funds.
For him, the benefit of a green issuance today is not so much about the rate, as the discounts compared to traditional issuances vary case by case.
“The benefits are more about accessing a specific investor, making a commitment to society, and having a more liquid security,” he said. “When we look at ESG and non-ESG bond curves, ESG bonds tend to perform better in times of volatility.”
The issuance comes two months after Ambipar raised R$ 717 million in a follow-on that was primarily funded by the company’s controller, Tércio Borlenghi Júnior, who invested R$ 560 million.
At the time, the company said it would use the funds to reduce its net debt by 18% and to provide breathing room to discuss prepayment and restructuring of part of its debt with its creditors.
At the end of the third quarter — before the follow-on funds — Ambipar had a net debt of R$ 4.2 billion, with a leverage of 2.9x EBITDA.
The coordinators are Bank of America, Morgan Stanley, BTG Pactual, and Itaú BBA.
