BRAZIL Law and Practice Contributed by: Caio Ferreira Silva, Thiago Braga Junqueira, Vinícius Pimenta Seixas and Rodrigo Vieira, Pinheiro Neto Advogados
need for the lengthy exequatur process in the STJ and eliminate the concurrent jurisdiction of Brazilian courts in disputes that may be brought abroad. Even though it is theoretically possible to enter into agreements in Brazil governed by foreign law (to the extent that the requirements of Decree Law No 4,657, of 4 September 1942, outlined above are duly complied with), security agreements in which the debtor or the assets are domiciled or located in Brazil are almost exclusively subject to Brazilian laws, as their foreclosure should occur in Brazil. In practice, most corporate loans involving Brazilian bor- rowers or securities issued by local companies are governed by Brazilian law or submitted to an arbitration procedure. However, Brazilian companies may access foreign markets by issu- ing debt securities offshore (indirect loans), the transaction documents for which are governed by foreign law. It is also common to have structures whereby Brazilian borrowers issue Brazilian law-governed securities for an offshore entity, which then issues foreign law-governed securities backed by the Brazilian law-governed credit agreements or securities, with offshore offering documents and securities being subject to the relevant applicable foreign law. 2.2 Use of Loan Market Association (LMA) Agreements or Other Standard Loans In Brazil, there are no loan market associations or standard documentation. The documents usually follow the generally applicable rules and regulations, and the terms and conditions are agreed upon between the parties. The main doc- uments for corporate loans are loan agreements
or CCBs. As for debt securities, their offering generally involves the execution of: • a purchase/subscription or underwriting agreement; • an indenture; • an offering prospectus (if required under the regulations applicable to public offerings); and • the reference form ( formulário de referência ), which must be filed with the CVM for the pub- lic offering of securities, with similar content to an offering memorandum. 2.3 Language There are no requirements for the documents to be executed in Portuguese. However, certain security documents and guarantee agreements must be filed with the competent Registry of Deeds and Documents or Board of Trades in order to be valid and enforceable vis-à-vis third parties, and any document filed before such public entities must be in Portuguese or must be attached to a certified translation into Por- tuguese. The same requirement for the certified translation applies to any enforcement of docu- ments or judgments by Brazilian courts. 2.4 Opinions In general terms, legal opinions issued within the context of acquisition finance transactions usually cover: • the certification by the law firm of the capac- ity and authority of the signatories for the Brazilian entities; • confirmation of relevant corporate or regula- tory authorisations; and • the fulfilment of any other requirements for the legal existence of the companies and undertaking of obligations pursuant to the financing documentation, as well as the
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