Constructora Norberto Odebrecht

completed

The proposed project consists mainly of refinancing CNO''s existing debt. In order to finance its activities and continued growth, CNO borrowed US$280 million, through a financial structure maturing in June and July 2002 . Due to the political uncertainty in Brazil, the recent crisis in Argentina, and the terrorist attacks to the USA, the international financial market has been adversely affected. It is in this context the company has requested IFC’s assistance in mobilizing US$280 million for the financing of its future operations (the project).IFC Role IFC''s role in this project includes: (i) providing financing that is otherwise currently not available; (ii) "bailing-in" other private sector financing sources through its B-loan mobilization program; (iii) advising the company on a more rational and sustainable financing structure and financial management through appraisal; and (iv) contributing in the improvement of corporate governance practices.Development ImpactThe Brazilian private sector at present is faced with multiple threats to its stability and prospects of future growth: the depreciation of the Real; the current political and economical uncertainty in Argentina; the political anxiety prior to the 2002 presidential election; the world economic slowdown; and the flight to quality since the September 11 event. These factors are seriously affecting Brazilian firms’ ability to raise financing necessary to maintain the normal course of business, let alone to invest for future growth. Even large companies that previously had access to market financing have lost access. Under the circumstances, demand for financing support from institutions like IFC is mounting and pressing. This requires IFC in the short-run to narrow its focus towards responding to such urgent demand, while remaining within the framework for its medium-term objectives. In relation to this project, the borrower has agreed to earmark US$1 million to finance a social project, acceptable to IFC.