Brazil prices tender offer for nine bond series; cap to be announced

By Susanna Moon

Chicago, Oct. 24 - The Federative Republic of Brazil said it priced the cash tender offer for several series of bonds, with the maximum purchase amount set at 7:30 a.m. ET on Oct. 24 and still to be announced.

The offer began at 6:30 a.m. ET on Wednesday and ended at 4 p.m. ET on the same day. Only holders in Asia could submit tender orders until 11:59 p.m. ET on Wednesday.

The purchase price for each $1,000 principal amount was set using the yield to maturity of a bid-side price of a U.S. Treasury note plus a fixed spread for the following notes:

• $2,505,537,000 6% global bonds due 2017, priced using 0.875% Treasury note due Jan. 31, 2017 plus 123 basis points for a purchase price of $1,125.48;

• $2.3 billion 5 7/8% global bonds due 2019, priced based on 1.25% Treasury note due Jan. 31, 2019 plus 128 bps for a purchase price of $1,154.96;

• $1,085,785,000 8 7/8% global bonds due 2019, priced based on 1.25% Treasury note due Oct. 31, 2019 plus 106 bps for a purchase price of $1,339.11;

• $372,887,000 12¾% global bonds due 2020, priced based on 1.375% Treasury note due Jan. 31, 2020 plus 114 bps for a purchase price of $1,559.80;

• $1,747,013,000 8 7/8% global bonds due 2024, priced based on 2.5% Treasury note due Aug. 15, 2023 plus 155 bps for a purchase price of $1,407.59;

• $664,249,000 8 7/8% global bonds due 2024, priced based on 2.5% Treasury note due Aug. 15, 2023 plus 155 bps for a purchase price of $1,407.59;

• $1,647,489,000 8¾% global bonds due 2025, priced based on 2.5% Treasury note due Aug. 15, 2023 plus 167 bps for a purchase price of $1,407.67;

• $1,650,163,000 10 1/8% global bonds due 2027, priced based on 2.5% Treasury note due Aug. 15, 2023 plus 189 bps for a purchase price of $1,580.16; and

• $617,597,000 12¼% global bonds due 2030, priced based on 2.5% Treasury note due Aug. 15, 2023 plus 277 bps for a purchase price of $1,757.76.

More offer details

The hypothetical price was $1,126.08 for the 6% bonds due 2017, $1,155.41 for the 5 7/8% bonds due 2019, $1,338.86 for the 8 7/8% bonds due 2019, $1,559.66 for the 12¾% bonds due 2020, $1,407.05 for the 8 7/8% bonds due 2024, $1,407.05 for the 8 7/8% bonds due 2024, $1,407.09 for the 8¾% bonds due 2025, $1,579.42 for the 10 1/8% bonds due 2027 and $1,756.87 for the 12¼% bonds due 2030.

For pricing both sets of 8 7/8% bonds due 2024, the 8¾% bonds due 2025, the 10 1/8% bonds due 2027 and the 12¼% bonds due 2030, the dealer managers used the actual U.S. Treasury rate to calculate the yield for the new bond.

Holders also will receive accrued interest up to but excluding the settlement date of Oct. 29.

Deutsche Bank Securities Inc. will bill and deliver. Deutsche Bank Securities Inc. (attn: liability management group, 855 287-1922 or collect 212 250-7527; in Asia +65 6423 5934; email US_Liability_Strategies_Team@list.db.com) and HSBC (Securities) USA Inc. (attn: global liability management group, 888 HSBC-4LM or outside the United States, call collect 212 525-5552; in Asia, +852 2822 4100; email liability.management@hsbcib.com) are the dealer managers.

Brazil also price about $3.2 billion principal amount of its 4¼% global bonds due 2025, with $1.7 billion to be allocated for the tender offer, according to a press release.

The information agent is Bondholder Communications Group (212 809-2663 or 888 385-2663).

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