For a Brazilian exporter, local bank financing is often short-dated and priced off a high domestic base rate. Meanwhile, the company sells coffee, beef, pulp or soy in US dollars to international buyers. Borrowing in dollars against those dollar revenues can reduce currency mismatch and extend tenor .
How lenders get comfortable
- Offshore cash flows. Export proceeds paid into an offshore collection account, assigned to the lender, give it control of the repayment source before money enters the local system.
- Holding structure. An offshore holding company or a clean onshore borrower with offshore guarantees, documented under English or New York law.
- Offtake quality. Contracts with creditworthy international buyers, sometimes supported by credit insurance.
- Reporting. Audited IFRS accounts and regular covenant reporting in a format the lender's portfolio team can use.
Where revenue is not naturally in dollars, the conversation turns to hedging cost and whether a local-currency structure such as an FIDC or a debenture is the better answer. We raise that question in the first week, before time is spent on a structure a credit committee would reject.
General information, not advice on any specific transaction. See Disclosures.