Chilean wood and pulp producer Celulosa Arauco y Constitución has called on Simpson Thacher & Bartlett LLP and two Veirano Advogados offices in Brazil to secure a US$2.2 billion sustainability-linked financing package to fund the development of its pulp mill in the Brazilian state of Mato Grosso do Sul.
The lenders relied on two A&O Shearman offices, Pinheiro Guimarães in Rio de Janeiro and Philippi Prietocarrizosa Ferrero DU & Uría (Chile) for the deal.
Latin Lawyer understands that Portaluppi, Guzmán & Bezanilla in Santiago advised Arauco in the deal too, but could not confirm before publication.
The deal was announced on 22 August.
The financing comprised two separate credit facilities. The first consisted of a US$1.2 billion term loan facility, whilst the second was a US$970 million export credit agency (ECA) loan, guaranteed by Finnish credit agency Finnvera.
ECA loans are issued by export credit agencies to help domestic companies reduce the risk associated with the exportation of goods and services to overseas jurisdictions.
Both loans feature certain environmental, social and governance measures which align with standards set out by the International Finance Corporation and the World Bank.
Arauco will use the proceeds from the financing to fund the development of its Sucuriú pulp mill in the municipality of Inocência in Brazil’s central-western state of Mato Grosso do Sul.
Powered by biomass-based energy sources, Sucuriú is tipped to be one of the world’s largest pulp mills once operational, with a potential capacity to produce 3.5 million tonnes of short-fibre pulp per year. It will also have four square kilometres of eucalyptus plantations.
Arauco issued US$500 million worth of notes in May to raise funds for the same project. Simpson Thacher advised the pulp producer on that occasion, too, whilst PPU’s Santiago office guided the underwriters.
According to Latin Lawyer’s news reporting, there have been four transactions through which Chilean paper and pulp companies have raised funds so far in 2025, including the two Arauco deals. In one of these operations, Chile’s CMPC issued green notes in Mexico in June, while Chile’s Papelera del Pacífico obtained a loan to refinance existing debt in July.
Simpson Thacher advised on the banks’ side in two of these deals, alongside PPU’s Santiago office. A&O, Cravath, Swaine & Moore LLP, Pinheiro Guimarães in Brazil, Baraona Marshall and Morales & Besa in Santiago and Mexico’s Galicia Abogados each provided counsel on one deal.
