Seaborn Networks is seeking US$400mn in project financing for the first direct submarine telecom cable between New York, US and Sao Paulo, Brazil.

The firm’s CEO, Larry Schwartz, tells GTR that the project will be financed under a traditional project finance structure, with debt provided with export credit agency (ECA) and/or development bank support. He adds that significant interest has been expressed and the firm expects to sign the financing at the end of Q2 2013, but cannot comment on other funding details.

“We have adequate capital for the initial phases of the project, as we have completed several equity funding rounds already. But the full project debt and equity will be expected to close this summer.

“The financeability of the project is driven by the unique dynamics of the US-Brazil route, which is itself influenced by the unprecedented growth of the Brazilian telecom market in recent years,” he adds.

The 10,700km-long cable will include a 350km branch to Fortaleza, Brazil, and will be installed by Alcatel-Lucent Submarine Networks under a turnkey contract, while Seaborn Network will own and operate the facility.

“The new cable will deliver new capacity on the main route for the majority of internet, data and voice traffic between South America and the rest of the world. It will also support a wide variety of consumer and business broadband services,” Schwartz explains.

Permit acquisition and marine survey work have been started by the two firms, with a ready-for-service date scheduled for Q1 2015, in time for the 2016 Rio Olympics.

Advisers on the project include Ernst & Young (tax), Milbank, Tweed, Hadley and McCloy (project), Wiltshire & Grannis (US regulatory), Choate Hall & Stewart (corporate) and Barbosa Mussnich & Aragao (Brazil). Seaborn has also engaged Jefferies & Company as overall project financial adviser, and Portland Advisers as financial adviser in connection with the project debt.