Despite continued constraints on international lender appetite for Latin American project credits, 2010 marked some huge advances in several sectors. Renewables, transport and oil and gas issuers all broke ground in accessing new funding sources. Governments such as Peru and Colombia breathed new life into their concession programmes, by relying on domestic debt providers.

Brazil’s Odebrecht stood head and shoulders above its peers in the variety of its financings, and for the ways in which these financings broke ground. It spon­sored three award-winning deals in Latin America – the Norbe drill ship refinanc­ing and the Rota das Bandeiras toll road bond. It closed two other deals – for the Ruta del Sol road in Colombia and the ODN I and II drill ships – that would have won in less competitive years and lost out to other Odebrecht deals in 2010. Odebrecht also hols 13.4% of the ELOS consortium, which closed, and won an award for the PPP1 high-speed rail con­cession in Portugal.

The above examples indicate a rare Latin American sponsor that is at home in multiple financing markets, whether cross-border or domestic capital markets, local bank markets or the international com­mercial and export credit agency space. It does this by maintaining the right level of coordinating between its various country and industry subsidiaries, some of which are recognised borrowers in their own right.

Odebrecht was founded in the 1940s, but it only strayed outside Brazil from the late 1970s, and has been active in the United States since the 1990s. But while Odebrecht’s signature construction pro­jects are located in the US and Brazil, it has notched up several firsts in project financing in a variety of jurisdictions, including Peru, Colombia, the Dominican Republic and Portugal.

Its willingness, and ability, to close previously-undeveloped sources of long-term financing comes down to its preference for locking in long-term financing at the first available opportunity, rather than relying on interim financings such as mini-perms and bridge loans. This prohibition is not absolute – both of its award-winners are refinancings – but indicates a preference for finding competitive long-term debt, regardless of its source, at the first attempt over continual efforts to optimise assets’ capital structures.

Odebrecht’s first Deal of the Year win was in 2006 for the IIRSA Norte concession, of which it owns 49.8% and is the largest share­holder, together with Grana y Montero (10.2%) and Andrade Gutierrez (40%). The financing was a $214 million 144A bond issue that benefitted from a partial guarantee from the Inter-American Development Bank. It monetised payment obligations from the Peruvian government, which it issued in exchange for completed work on concessions.

The deal was the first for the Peruvian PPP market, and a completely new way of financing infrastructure concessions in the capital markets. It followed the deal in 2007 with an even larger issue, of $630 million, for the IIRSA Sur section, which was open to Peruvian investors. As the crunch hit, Peruvian, mostly pension fund, and US, mostly hedge fund and trading, accounts competed to offer the best terms to issuers.

The experience helped the Peruvian market weather the credit crunch, as local investors stood ready to fund the government’s ambitious infrastructure concessions programme. For a while Odebrecht flirted with adapting the structure to the Ruta del Sol 2 section in Colombia, but found the coun­try’s banks (one of which Corficolombiana, was a fellow sponsor) too accom­modating. It closed a Ps1.5 trillion ($775 million) financing for the 528km road section in November.

The experience of bringing untested structures to bond investors proved useful in closing the Rota das Bandeiras bond financing in its home market. The financ­ing is of an existing asset, but nevertheless was the first time bond investors had been asked to accept any kind of traffic ramp-up risk. The R1.1 billion ($659.1 million) bond, led by Banco Santander (lead), Banco do Brasil, Banco Itau and Banco Bradesco, refinanced a bridge loan of the same size and accompanied a BNDES construction loan of R921.5 million, the first time BNDES has been prepared to rank pari passu with bond investors.

But its oil and gas activities probably give it the largest following among inter­national lenders. It is the majority share­holder in listed petrochemicals producer Braskem, which has been an occasional user of export finance debt, and plans to approach the project finance market for its Etileno XXI petrochemical project in Mexico. SMBC is its financial adviser on that $2.5 billion deal, in which it would be a 65% sponsor, with domestic firm Idesa owning the rest. A willingness to bring on board local construction firms in its ventures outside Brazil is a hallmark of its financings.

It has also earned a strong reputation in upstream oil and gas, on the back of a number of well-received rig financings. It closed the largest, longest and cheapest of several rig bonds to close in 2010, the $1.5 billion refinancing of its Norbe VIII and XI vessels, even as it closed a $890 million construction financing, with a mixture of commercial and ECA lenders, in November 2010. The 12-year construction loan featured commitments from BNP Paribas and HSBC $75 million each; Banco Itau, Banco do Brasil, Banco Santander, BTMU, BBVA, ING, Societe Generale, Credit Agricole, and Intesa San Paulo $53.6 million each; Unicredit, DNB Nor and WestLB $42.9 million each; Sumitomo and Natixis $32.2 million each; and Caja Madrid, Banesto and Citibank.

Odebrecht has also been developing a franchise in building large hydropower plants, and was among the sponsors of the San Antonio hydro plant on the Madeira river, with a 19% stake. That deal closed on over R8 billion in BNDES and co-financed debt in early 2009. It is looking to apply the experience to a number of promising properties outside Brazil, including the 403MW Chagilla hydro project in Peru, for which it is looking for $600 million in debt.