In 2002, the market for syndicated loans in Brazil was moribund. Deal sizes were pitifully low and shrinking. Last October, Companhia Vale do Rio Doce (CVRD) arranged a two-year syndicated loan to raise $14.6bn for an acquisition and other large Brazilian firms are starting to use syndicated loans as part of a strategy to cheapen debt and lengthen tenors on a massive scale.
Five years ago, syndicated deals in Brazil raised on average $30m-$80m. Deals in 2002 totalled just over $12bn. International banks were almost completely absent from the market and the few participants that had stayed in were very cautious: they would only arrange syndications on a best-efforts basis when the deal was backed, typically with exports. Almost all such transactions ended up as club deals of just two or three banks.
