With the recovery of Brazil's economy and stock exchange trading at the highest level in history, 2017 proved to be a busy year for Brazilian lawyers. "This year was different," says Alexandre Bertoldi, a managing partner at Pinheiro Neto.
The law firm worked on some notable deals in Brazil across different financial instruments, including the return of Brazilian national development bank BNDES to the cross-border bond market with a $1 billion green bond after a three-year absence. Pinheiro Neto also worked on Natura's €1 billion ($1.11 billion) acquisition of The Body Shop from L'Oréal.
The firm added six new partners to accommodate growth, Bertoldi says. Despite optimism that activity will continue smoothly until July, October's presidential elections could bring uncertainty. Brazil "might have a candidate against foreign investment and privatizations, or we might have the prospect of three to five excellent years if we get a candidate who believes in the markets," he says.
Similar to 2017, some of the bigger Brazilian corporates will likely undertake liability management exercises — including maintaining divestment programs — to reduce leverage, he says.
Bertoldi expects the availability of spinoffs will spur a step up in M&A activity. Buyers "will tap the capital markets to finance acquisitions" since banks haven't resumed lending, he says. LF