Simpar’s $625 Million Sustainability-Linked Notes Offering and Concurrent Tender Offer

Milbank, NautaDutilh and Mattos Filho, Veiga Filho, Marrey Jr. e Quiroga advised Simpar on the transaction. Cleary Gottlieb and Machado Meyer represented BTG Pactual, J.P. Morgan, Morgan Stanley, Santander and UBS Investment Bank as initial purchasers in the offering. Jones Walker advised the fiduciary agent.The offering of $625 million 5.200% notes due 2031 was issued by Simpar Europe (formerly JSL Europe), a Luxembourg subsidiary of Simpar S.A. (Simpar), and guaranteed by Simpar. The transaction priced on January 14, 2021, and closed on January 20, 2021.

Simpar, through its subsidiaries, operates in six segments: logistics services (JSL), car rental and fleet management (Movida), leasing of truck, machinery and heavy equipment (Vamos), mobility and logistics focused on public tenders (CS Brasil), mechanical and brokerage services for automotive insurance sales (Original Concessionárias) and ancillary financial services for the purchase of vehicles and equipment (BBC). Simpar intends to use part of the net proceeds from the sale of the notes to fund a concurrent tender offer to purchase US$389.9 million of Simpar Europe’s 7.750% notes due 2024, guaranteed by Simpar. The tender offer launched on January 11, 2020, with settlement on January 22, 2020. The dealer managers for the tender offer were BTG Pactual, J.P. Morgan, Morgan Stanley, Santander and UBS Investment Bank.

The notes are linked to Simpar’s ability to achieve, by December 31, 2025, a specified target reduction of Greenhouse Gas Emissions, as confirmed by an independent external verifier, under Simpar’s new Sustainability-Linked Securities Framework adopted in January 2021.  If this target is not met, the coupon rate on the bonds will automatically step up to 5.450% per annum.  The notes are listed on the Singapore Exchange Securities Trading Limited.

Milbank advised Simpar S.A. with Andrew R. Walker,  Catherine Leef Martin, Mateus Costa-Ribeiro, David G. Hanno, Samantha Rocco, Tobias Stirnberg and Alexia Theodora Raad.

Mattos Filho, Veiga Filho, Marrey Jr. e Quiroga advised Simpar S.A. with Frederico Kerr Bullamah, César Matteus Rizzo da Silva, Gabriella Di Tommaso Latorre, Luís Felipe Oliveira Haddad and Raquel Aguiar Duzze Domingos.

NautaDutilh advised Simpar Europe with Romain Sabatier, Jean-Marc Groelly, Thibaud Muller, Elisabeth Hack, Isabelle Absalon and Ilhami Karamemis.

The Cleary corporate team advising the initial purchasers included partner Juan Giráldez (Picture), associates Luisa Franciss Galliez and Andrea Lavourinha, based in São Paulo, and international lawyer Caroline Ogata in New York. Senior attorney David Stewart Fisher and associate Alexander Cadmus, provided tax advice out of New York.

In Brazil, Machado Meyer advised the initial purchasers with Alessandra de Souza Pinto, Gustavo Secaf Rebello, Alexandra Menescal Tupper Palhares and Renata Augusto Passos.

Involved fees earner: Alexander Cadmus – Cleary Gottlieb Steen & Hamilton; Luisa Franciss Galliez – Cleary Gottlieb Steen & Hamilton; Juan Giráldez – Cleary Gottlieb Steen & Hamilton; Andrea Lavourinha – Cleary Gottlieb Steen & Hamilton; Caroline Ogata – Cleary Gottlieb Steen & Hamilton; David Stewart Fisher – Cleary Gottlieb Steen & Hamilton; Renata Augusto Passos – Machado Meyer Advogados; Alessandra de Souza Pinto – Machado Meyer Advogados; Alexandra Menescal Tupper Palhares – Machado Meyer Advogados; Gustavo Secaf Rebello – Machado Meyer Advogados; Gabriella Di Tommaso Latorre – Mattos Filho Veiga Filho Marrey Jr & Quiroga; Frederico Kerr Bullamah – Mattos Filho Veiga Filho Marrey Jr & Quiroga; César Matteus Rizzo da Silva – Mattos Filho Veiga Filho Marrey Jr & Quiroga; Luís Felipe Oliveira Haddad – Mattos Filho Veiga Filho Marrey Jr & Quiroga; David Hanno – Milbank; Catherine Leef Martin – Milbank; Alexia Raad – Milbank; Samantha Rocco – Milbank; Tobias Stirnberg – Milbank; Andrew Walker – Milbank;

Law Firms: Cleary Gottlieb Steen & Hamilton; Machado Meyer Advogados; Mattos Filho Veiga Filho Marrey Jr & Quiroga; Milbank;

Clients: BTG Pactual; J.P. Morgan Securities LLC; Morgan Stanley; Santander; Simpar SA; UBS Investment Bank;

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