IFLR 1000
The Guide to the World's Leading Financial Law Firms

"It's been a wonderful year in terms of diversity and volume - a lot of transactional banking deals, syndicated loans, cross-border loans, and deals scheduled like credit transactions with credit agreements," one attorney reports. "We've got more work than last year," remarks another. "We're not up to pre-crisis level but we're on the way; maybe this year."

Not only is Brazil one of the fastest-growing economies in the world, it is also Latin America's largest. Though inflation continues to be a concern, closing at 5.9% in 2010 and increasing to 6.5% in 2011, in the words of one attorney, "The economy is hot but not overheated."

The boom is translating into an uptick in banking activity across the board, following a slowdown created by a brief post-crisis recession. In 2011, the government reported that domestic consumption, fuelled by fiscal policy and rapid credit growth, was the main driver of Brazil's boom over the previous two years. Other factors include the country's appeal to foreign investors, increased government spending, a rich reserve of natural resources and the high prices of commodities, an addition of more than 22 million people to the middle class between 2003 and 2009, and Brazil's upcoming role as host to the World Cup in 2014 and the Olympic Games in 2016.

By all accounts, the business community is receptive to the country's new president, Dilma Rousseff, who was inaugurated in January 2011 and was former president Lula's former Chief of Staff. "So far she's done a great job managing the country," says one source. "A lot of people are pleasantly surprised that she's not just trying to continue Lula's politics but putting on her own stamp as a manager." Another partner agrees: "She has proven herself to have a sound decision-making process in overseeing the Rio Olympics. She's more of a technocrat than a politician."

On the capital markets front, the picture is a calmer one. On the equity side, the last couple of years has been relatively quiet but the end of 2010 and 2011 have seen the IPO market at least come back in some part. "The market in general has improved this year," says one partner. "The beginning of this year, very intense; a lot of IPOs."

Despite this increase, investors remain highly selective and many offerings have not generated as much capital as would have been expected. "The IPOs that have launched are companies that have strong histories and are more well known," says one partner. "The pricing of IPOs is not the same as before the crisis. Before the crisis pricing was at the top range; now it is low and middle."

Competitors have also noted that the regulators are now much more attentive and aggressive when considering new products and deals, as one partner explains: "A lot of activity with the Brazilian Securities Commission going after insider trading, market manipulation." Although most would agree with a more rigorous regulatory regime, it can lead to a downfall in activity. "This has had an effect on capital markets activity in law firms last year," the same partner says.

One general concern has been the country's reliance on too much foreign investment, so the government has created an incentivisation program to encourage domestic banks to make the 20 and 30-year loans needed for Brazil's big infrastructure projects. One lawyer explains, "There was a problem in the past with banks funding themselves with foreign currency so the government created credit incentives. This will shift the amount of foreign funding for banks and the foreign exchange rate."

Overall though, one practitioner observes: "The environment is more one of opportunities than challenges." However, he acknowledges: "The biggest challenge for Brazil is to have the infrastructure work done on time and within budget. There are a lot of opportunities surrounding this. People will scramble to get things done."

Barbosa's capital markets practice is held in high regard and last year Camila Goldberg Cavalcanti led the team on a number of notable transactions. One example saw her acting for Magnesita on a public offering, which raised R$252.2 million ($153 million) in February 2011. This was the follow on to a prior offering. Cavalcanti also led as the firm acted for Hospital Maternidade on its $1 billion debenture issue.

Fabíola Augusta A de O Bello Cavalcanti was also active and last year he advised Brasil Brokers on its R$189.3 milllion share issuance in March 2011.

The firm's banking capacity was hit in June 2010, when partner Pedro Lanna Ribeiro left the firm. However the team has maintained a steady stream of financing mandates.

One such highlight saw the team act for brokerage firm XP CCTVM in regards to a R$100 million capital injection by UK private equity fund Actis.

The firm also gave debt restructuring advise to San Antonio Oil & Gas and Usina Caeté.

The banking and capital markets teams at Lefosse is led by Carlos Barbosa Mello. The team benefits from its links with UK magic circle firm Linklaters which provides additional work for the firm through its international network.

On the banking side, one of the firm's major mandates saw it advise RBS on the establishment of a new investment bank in Brazil including the regulatory and corporate aspects of the undertaking. The team also advised Credit Suisse as administrative agent on amendments and extensions to the CEVA Groups senior credit facilities.

On the capital markets side, the team had a steady stream of equity related transactions last year including the Hong Kong IPO and Rule144A placing of Sateri Holdings. The deal was notable as it was the first company of its size to be listed in Hong Kong with the bulk of its assets located in Brazil. The team advised the underwriters.

Other equity work, this time on the issuer side, saw Rodrigo Junquera act for Autometal on its Brazilian domestic IPO in Brazil and private placement in the US and similar work was also undertaken for Sonae Sierra Brazil by Carlos Mello.

On the debt side one of the team's largest mandates came from Banco Panamericano on an issue of $500 million in 8.5% notes both in the US and in the wider international markets.

The Levy & Salomão banking team was kept busy with restructuring mandates last year including advice to the Novelis Group in the Brazilian aspects of its wider $4.8 billion debt restructuring. Advising on that deal was Luiz Roberto de Assis who also provided advice to the Brazilian subsidiaries of the New Zealand Rank Group in the wider $3.2 billion financing of the group's restructuring.

Bank side mandates were also on the cards and one deal of note saw lead partner Eduardo Salomão Neto acting for Rabobank and Banco Itaú Chile on the financing of the Masisa Group in Chile.

The firm also assisted its client base in a number of regulatory matters including providing advice to Banco Mercedes Benz do Brazil and Banco BMG on Resolution 3.954 as issued by the National Monetary Council.

The firm's capital markets offering, led by Jorge Eduardo Prada Levy and Ana Cecília Manente, benefitted from expansion last year with the hires of Carlos Portugal Gouvêa from private practice and Daniel Tardelli Pessoa from Souze Cescon Barrieu & Flesch.

Debt work was the order of the day last year and highlights included advise to BB Banco de Investimento and Invepar on the issue of debentures by the latter and commercial papers by Concessão Metroviária do Rio de Janeiro. Invepar is a pension-linked company, which invests in infrastructure. In a similar deal the team also acted for SPI a company of the highway operator OHL Group on the issues of debentures.

Machado Meyer maintains its position in tier one in both the banking and capital markets tables after another strong year. "It is a big law firm, full coverage and has big clients in different areas that may be relevant in banking issues, for example: banking issues but also tax. Good quality of service," says one peer.

However, it has not all been plain sailing and last year also saw the departure of key capital markets partner Carlos Motta to Mayer Brown associate Tauil & Chequer.

However despite this setback, there is no arguing with the firm's deal list which last year saw partners Daniel de Miranda Facó, Giovanni Biscardi and Cristina Tomiyama advise Petrobras on a R$120 billion ($74 billion) offering of shares consisting of a primary offering on the São Paulo Stock Exchange and an international offering in the form of American Depositry Shares on the Nyse. The funding will be used for the expansion of the company's exploration programme, including securing assignment agreements with the Brazilian government.

The firm again advised the issuers in the form of Direcional Engenharia on the offer of 28 million shares in Brazil and to certain institutional investors in the US, with the offering raising R$308 million.

Showing the breadth of the practice, the firm also worked on a fair number of bank-side mandates. De Miranda Facó and Tomiyama advised Banco BTG Pactual, Banco de Investimentos Credit Suisse (Brasil) and Santander as underwriters on a share offering by Estácio Participações which raised R$623 million. The two partners again advised Credit Suisse alongside Banco Itaú BBA as underwriters on brick producer Magnesita Refratários' R$278 million share offering.

The firm's debt-side practice also had an impressive year. On the issuer side, the team acted for Gerdau Trade and Banco Safra on bond issuances which raised $1.25 billion and $500 million respectively. On the underwriter side, Eduardo Avila de Castro advised Banco Bradesco, HSBC Securities, JPMorgan Securities and Bank of America Securities on BM&FBovespa's offering of $612 million of 5.5% notes due in 2020.

Nei Zelmanovits also had a busy year on the underwriter side, including work for BNP Paribas, Credit Suisse and Deutsche Bank Securities on a €750 million ($1 billion) offering of 4.125% notes due in 2017. He also advised Bank of America Merrill Lynch, Bradesco BBI, HSBC and JPMorgan as underwriters and BB Securities and Espírito Santo Investment as joint lead mangers of Banco Bradesco's $1.1 billion notes offering. The Bank reopened the offering in January 2011, generating an additional $500 million.

Mattos Filho took a significant blow in August 2010, when partner Carlos Barbosa Mello left the firm to join Linklaters alliance partner Lefosse. Mello, who is described by one peer as: "Very senior; extremely well known," took a team of 15 other lawyers with him including fellow partner Rodrigo Azevedo Junqueira, and the market will wait to see how the firm reacts. The move is a latest in a series of partner departures from established Brazilian firms to often smaller operations that have an alliance with an international firm.

Despite this setback, the firm can still point to a decent deal list last year, on both the banking and capital markets sides.

IPOs threw up a lot of work for the firm , and in particular partner Sergio Spinelli Silva Jr, who advised on both the Petrobras and Arezzo Indústria e Comércio offerings, which raised R$565 million ($348 million) and R$120 billion respectively. The team also acted for the underwriter on the primary and secondary offering of shares in Banco do Brazil, which raised R$9.7 billion.

On the debt side, Jose Eduardo Carneiro Queiroz and Marina Anselmo Schneider were kept busy acting on both underwriter and issuer clients. In the former category, the pair acted for Commerzbank and HSBC Securities on a $1 billion notes issue by Banco Industrial e Comercial. The team also acted for the issuer BM&FBovespa in its $612 notes issue on the Brazilian Stock Exchange.

The market remains convinced that though Pinheiro Guimarães has a strong practice in both banking and capital markets, its focus and greater strength is as banking counsel. "Very respectable. For many years they were the almost exclusive representation of Citibank," says one rival.

This was reflected by the firm's deal list last year, with a number of strong mandates on both the borrower and lender side of the banking sphere.

One highlight saw the team represent Export Development Canada, as administrative agent and lender, in a $1 billion financing to Vale, Vale Canada, Vale Inco Newfoundland & Labrador and Vale International. The team also acted as lender counsel to China Development Bank in regard to a $500 million loan granted to Telemar Norte Leste and Corporación Andina de Fomento (CAF) on a $500 million loan to Electrobras.

On the borrower side, the firm advised $1 billion on a syndicated loan to client Votorantim. The deal was guaranteed by Votorantim Participações, the holding company of the Votorantim group, and closed in June 2010.

In the capital markets space, the firm is best know for its work as arrangers counsel, and this was backed up by the firm's deal list last year. One highlight saw Plinio Pinheiro Guimarães, Beatriz Pereira de Souza and Marcela Taquette Vaz advise Credit Suisse Securities, Banco Bradesco, BB Securities and JPMorgan Securities as arrangers of Vale's $1.8 billion notes offering in September 2010.

Francisco Pinheiro Guimarães was also kept busy acting for Banco Itaú Europa, HSBC Securities, Morgan Stanley, Santander Investment Securities and BB Securities on a $1 billion notes offering by steel producers CSN Resources. He also advised Banco Itaú again alongside BB Banco de Investimento and Banco Bradesco on a placement programme and offering of debentures BNDES Participações.

Pinheiro Neto is one of only two firms, alongside Machado, to maintain its top tier postion in both tables this year. This is credit to the firm's balanced financial offering, which continues to be recognised by the market.

However the firm did have a few departures to deal with last year within its banking and capital markets practice. Lior Pinsky and Carlos Lobo both left the firm to join Veirano, while Daniela Anversa Sampaio Doria moved in-house.

The firm's banking practice has shown its strength this year in the regulatory space, including advising the Brazilian Association of Foreign Banks (ABBI) on the new rules surrounding the establishment of representative offices by international banks. The firm has also advised Merrill Lynch on various regulatory issues.

On the capital markets side, the equity and debt teams are led by Henrique Silva Gordo Lang and José Carlos Junqueira Meirelles respectively.

On the equity side, the largest mandates saw the firm act as underwriters counsel, including advising Banco Itaú, BTG Pactual and Credit Suisse on the R$1.37 billion ($846 million) IPO of Ecorodovias Infraestrutura e Logística and Credit Suisse, Goldman Sachs and Citigroup again as underwriters on the R$2.5 billion IPO of petroleum company HRT Participações IPO.

In another substantial deal, the team advised Banco do Brazil as the issuer in an $8.8 billion share offering.

On the debt side, the team acted for Santander on an issue of $2.8 billion 6.75% convertible bonds, due in 2013.

Souza Cescon had a good run of acquisition finance deals this year originating from key client Santander.

In one example, the team advised the bank on a $1.6 billion facility to State Grid for the acquisition of seven energy transmission companies from the Plena Group.

Santander also called in the firm to advise it alongside BTG Pactual, Banco do Brazil and Banco Votorantim on a $1.8 billion investment alongside Cemig in Light. The deal sees the banks take a 26.06% stake in the company.

Another highlight sees the team acting for Union Bank as counsel to a banking syndicate on a $800 million joint export prepayment facility with Fibra Trading International for the financing of a pre-export of wood pulp by Fibria Celulose.

Tauil & Chequer benefits from its association with Mayer Brown, which allows it to tap into a wider client base than it perhaps would otherwise have access to.

The banking and capital markets team's key partners are Carlos Motta, a former partner at Machado Meyer, who heads the capital markets group and Eduardo Soares who maintains a focus on projects and regulatory work.

Motta was the firm's most active practitioner in capital markets work last year. Debt side highlights included acting for the likes of Gafisa and PDG Realty on their debenture issues and on the bank side Santander on a fourth issue of debentures by Energisa.

On the equity side, the firm's time was largely taken up with underwriter mandates. Examples include advice to Merrill Lynch on a share issue by Queiroz Galvão Exploração e Perfuração. The team also represented JPMorgan as underwriters on the first offer of shares by Desenvix Energias Renováveis.

Ana Carolina de Salles Freire was involved on two of the firm's largest banking deals last year providing advise to the Brazilian branch of Crédit Agricole on a R$100 million ($56 million) revolving credit facility to Hertz Brazil. De Saales Freire also provided advice to Bank of America on the Brazilian law aspects of a $2.3 billion loan to Novelis.

In capital markets Antonio Felix de Araujo Cintra acted for Anhanguera Educacional on a R$844.1 million offering of shares. On the debt side de Araujo Cintra was again involved acting for Iracema Transmissora de Energia on an R$109 million issue of debentures.