With a 10-year track-record in this dynamic nation – and the only Canadian bank in Latin America’s largest economy – Scotiabank has stood steadily in Brazil’s ‘corner,’ coaching multi-national and Brazilian companies and investors to make the right moves and win timely opportunities.
In fact, Scotiabank Brazil’s Global Banking and Markets team has backed many large local corporate clients, including top energy firm Raizen S.A. as it recently issued the largest IPO year-to-date on Brazilian and Latam exchanges.
A local coach under a big umbrella
“For those with an appetite for good opportunities, this is a country with a promising business environment, strong institutions, and considerable demand for investment,” says Paulo Andre Bernardo, Country Head of Scotiabank Brazil, as he describes this country of 212 million people, known as one of the world’s largest democracies and the 12th largest economy by GDP.1
Brazilian-born Bernardo speaks from experience, having joined Scotiabank a decade ago to grow the freshly established wholesale bank and apply his expertise in domestic and international corporate, investment banking and capital markets.
“When we first started the corporate bank in Brazil, we made a very strong effort to meet business leaders and explain the value we could provide as a local, nimble bank that operates with the global support of Scotiabank,” recounts Bernardo. “Very quickly, companies recognized the agility of our tight-knit, but globally-connected, team to meet their demands.”
Scotiabank proved itself as a strategic lender and derivatives provider to many of Brazil’s top companies, from energy and power, to infrastructure, agriculture, automotive, forestry and retail. And, with the Bank’s extensive presence in neighbouring Pacific Alliance countries, the local team also supports the needs of Multilatinas based in Chile, Colombia, Mexico and Peru.
They also serve North American, European and Asian corporate and institutional investors that seek a local banking partner to support their Brazilian deal-making. Among them, the Bank has been a long-time advisor to world-leading alternative asset manager Brookfield Asset Management, as it pursues opportunities in Brazil’s infrastructure, real estate and energy sectors.
With such capabilities, Scotiabank has steadily grown its local offerings, introducing investment banking in 2019 and recently launching its equities broker/dealer. “We work with strong companies, and they know they can count on us to be a dependable partner, with integrated local and global capabilities.”
Bernardo explains that Brazilian companies they serve are delighted by the agility of the 75-person Sao Paulo office, compared to the bureaucratic, mega-bank competitors: “Clients love that they can call the CEO of this Bank or the Head of Investment Banking and we can quickly pull together the team to share intelligence and develop solutions.” That, in turn, provides clients with rapid decision-making and easy access to insights and ideas from Scotiabank’s executives and trading desks in Toronto, New York, over Latam borders, or across the global network.
Bernardo notes that Scotiabank gains profile whenever it earns mandates to advise prominent Brazilian companies making domestic acquisitions. The team was proud to rank second overall in Finanças Mais 2019 ‘Best Performance Wholesale Bank Awards,’ and earn best ‘investment grade bond’, ‘corporate bond’ and ‘syndicated loan deals’ in 2019 from Bonds & Loans Latin America.2
Insights and solutions, in Brazil and beyond
Eyes, ears, and boots in Brazil are invaluable, in light of the country’s dynamic economy and history. While Brazil enjoyed prolonged growth, fueled by an emerging middle class and ambitious infrastructure and social system investment, it slowed in recent years, and a 2020 recession was worsened by the pandemic, stalled commodity trade, and a controversial political regime.3
Analysts now report that Brazil’s economy is returning to pre-pandemic levels, thanks to growing trade, economic stimulus programs and rising vaccination rates4, however it could face headwinds from higher interest rates and inflation.5,6 In particular, Scotiabank Global Economics forecasts a 5.4% increase in Real GDP in 2021, followed by 2.3% growth in 2022.7
“Many clients are approaching us about their future liquidity needs, in light of potential volatility in credit and equity capital markets in the upcoming election year,” observes Bernardo. “At the same time, companies are actively looking to expand, by consolidating or diversifying their business portfolios to take advantage of opportunities created in a challenging environment.”
Bernardo points to growing investment opportunity in both green energy – including wind and solar farms – and the natural gas industry, as a new regulatory framework opens the gas market to competition and investment by regional players. Foreign investors continue to covet opportunities to provide infrastructure capital for new roadway and rail networks, shipping capacity and airports.
“We keep up very fluid and constant conversations with our clients so we can bring potential opportunities to their attention,” explains Bernardo. “And, with the strong relationships we’ve built between senior bank and business leaders, they trust we can respond quickly, and deliver large ticket support, when they need.”
Bringing landmark transactions to market
If Scotiabank was known as a quiet, dependable player in Brazil, they’ve turned up the volume leading into the Bank’s 10th anniversary in the country, thanks to recent, high-profile transactions.
Among them, in September 2020, Scotiabank acted as Global Coordinator and Joint Bookrunner when Suzano Austria GmbH, the prominent Brazilian forestry and paper products company, issued a US$750 million, sustainability linked bond series – the company’s first ever sustainability-linked bond. The transaction was extremely well received, and almost 10 times oversubscribed, with strong support from North American and European-based ESG investors. It also garnered industry praise, earning recognition in LatinFinance’s 2020 Deals of the Year, receiving Sustainability-linked Bond of the Year by the 2021 Environmental Finance Bond Awards, and winning Ground-Breaking Deal of the Year in the Bonds & Loans Latam & Caribbean Awards of 2021.8
Most recently, Scotiabank distinguished itself as Joint Bookrunner on the US$1.3 billion initial public offering (IPO) of Raízen S.A., Brazil’s fourth largest company in Brazil and a leading integrated renewable energy company in Latin America. This transaction marked Scotiabank’s first IPO in the Brazilian market, the largest IPO in Brazil in 2021 year-to-date and the fifth largest IPO in Brazil’s history. It also broke records across the continent, as the largest IPO in Latin America in 2021 year-to-date, and the largest IPO of an energy company in Latin America’s history.8
With this transaction securing very high demand, with more than two times oversubscription, and achieving a final demand book from more than 100 participants, it highlights the connectivity of Scotiabank’s Brazilian and Americas and global Corporate & Investment Banking, U.S. and Latam Equity Capital Markets and Equities teams, working together to deliver the best-structured and executed solution for the client.
Alluding back to that focused fighter who perseveres to claim victory in a noisy boxing ring, Bernardo concludes that, “We talk with many members of the international community who continue to recognize the possibilities in Brazil, as one the world’s largest democracies, with well-established institutions and solid companies with considerable growth opportunities. Over ten years in Brazil, we’ve been a strong, reliable partner, and we stay close to our clients to meet their funding needs and advise them on the best way to get there.”
For more information about Scotiabank’s Wholesale Banking solutions and opportunities in Brazil, please contact: