Most of the credit documentation was under English law; most of the collateral documentation was under Brazilian law; and our clients’ debt was in US dollars.

Also, a separate group of lenders comprised Brazilian banks and development finance institutions (DFIs) with debt instruments under Brazilian law and denominated in Brazilian real.

COVID-19 was in full swing, so physical meetings were impossible; the Brazilian real was severely devalued, amplifying the debt; and some of the bank group were pulling back from the Brazilian market and structured trade commodity finance, making negotiations harder as long-term relationships were becoming less relevant right when we needed to find common ground.

At the same time, Biosev’s eventual purchaser, Raizen, was seeking to go public in a record-breaking IPO. So negotiating a solution with Raizen, Biosev, and Louis Dreyfus took almost two years.

Complex interest rate and commodity derivatives had to be negotiated, and the closing involved several agency and escrow teams and account banks and multiple days of funds flowing through banks in Brazil, Europe, New York and Houston.

Mayer Brown drafted and negotiated highly bespoke intercreditor arrangements involving detailed discussions on 10-year foreign currency and interest rate hedging.

Our clients were repaid 100% of the debt owed—after originally expecting to recover 50%, at best—and Raizen acquired Biosev debt-free.

With Biosev’s plants still operating, Brazil and Raizen continue to top the charts: Brazil for countries producing sugar and Raizen for companies producing ethanol, a renewable fuel made from sugar.