Record demand from investors resulted in the final issue amount exceeding by 35% the initial offering by the Company, the world’s leading producer of eucalyptus pulp
Fibria, the world’s leading producer of eucalyptus pulp, has just announced the closure of the issue of Agribusiness Receivables Certificates (CRA), which resulted in the subscription and payment of the total amount of R$1.35 billion, which includes the initial offering of R$1 billion plus a follow-on offering of an additional 35%, in accordance with the rules of the Securities and Exchange Commission of Brazil (CVM), due to heavy investor demand. The Fibria operation is the largest volume of CRAs ever issued in the Brazilian market.
Fibria issued two series of Agribusiness Receivables Certificates: one 4-year series of R$880 million (maturing in 2020) yielding 97% of the overnight rate (CDI); and one 7-year series of R$470 million (maturing in 2023) and yielding IPCA + 5.9844% (NtN-B 2022 – 0.25%). The CRA issue was backed by export credit notes (NCE) owed by the Company.
According to the Chief Financial and Investor Relations Officer, Guilherme Cavalcanti, the book building process registered record demand from investors for the certificates, which reached R$2.4 billion.
“Investor confidence in Fibria, which continues to be rated investment grade with a stable outlook by two of the leading international rating agencies – Fitch and Standard & Poor’s – resulted in heavy demand for our receivables certificates. This operation is the largest CRA issue ever made in the Brazilian market,” said Mr. Cavalcanti.
The issue aims to raise funds for Fibria’s agribusiness activities, as well as for production and sales under the Company’s pulp exportation program.
According to Marcelo Habibe, General Manager – Treasury, the issue cost was lower than the cap rates for both series, since the company issued at 97% of the CDI for four years, for which period the cap rate was 100% of the CDI; and the 7-year series was issued for IPCA + 5.9844%, for which the cap rate was equivalent to NtN-B (Brazilian government bonds) + 0.25% and Fibria closed at NtN-B – 0.25%.
“It was an advantageous operation for Fibria. While we increased the capital raised by 35%, we also managed to reduce the final cost compared to the initially expected rates. We also had a record participation of institutions in the offering that were interested in distributing our CRAs,” said Mr. Habibe.
Fibria’s CRA issue was underwritten by Itaú, Banco do Brasil, Bradesco, Citibank and Banco Votorantim, and was rated brAAA by Standard & Poor’s (S&P).
The world leader in eucalyptus pulp production, Fibria strives to meet the growing global demand for forestry products in a sustainable manner. With production capacity of 5.3 million tons of pulp per year, it has industrial units in Aracruz (Espírito Santo), Jacareí (São Paulo) and Três Lagoas (Mato Grosso do Sul), as well as in Eunápolis (Bahia), where it operates Veracel in a joint operation with Stora Enso. Fibria has 969,000 hectares of forests, with 568,000 hectares of planted forests, 338,000 hectares of environmental preservation and conservation areas and 63,000 hectares destined for other uses. The pulp manufactured by Fibria is exported to more than 40 countries. In May 2015, Fibria announced the expansion of its Três Lagoas unit, which will receive a new line with annual pulp production capacity of 1.95 million tons and is slated for startup in the fourth quarter of 2017.
With stock listed on the Novo Mercado listing segment of the São Paulo Stock Exchange (BM&FBovespa) and Level 1 ADRs listed on the New York Stock Exchange (NYSE). Fibria has 29.42% of its capital held by Votorantim Industrial S.A., 29.08% held by BNDESPAR and 41.50% represent by its free-float.