Brazil's Odebrecht gets tenders for 76% of 7% notes by offer's end, 54% of 6% notes by early date

By Susanna Moon

Chicago, Nov. 1 - Construtora Norberto Odebrecht SA said investors tendered $379,033,000 principal amount, or about 76%, of its affiliate Odebrecht Finance Ltd.'s $500 million of 7% senior notes due 2020.

The tender offer and consent solicitation for the 7% notes ended at 5 p.m. ET on Oct. 31.

The company is also tendering for Odebrecht's $800 million of 6% notes due 2023.

By the early tender deadline for the 6% notes, which was 5 p.m. ET on Oct. 31, investors had tendered $428,465,000 principal amount, or 54%, of those notes. The offers began on Oct. 23.

As already noted, the company will repurchase any and all of the 7% notes. The amount of 6% notes accepted for purchase will be limited to $450 million less the principal amount of 7% notes accepted for purchase and will be capped at $300 million.

Based on the amount of 7% notes accepted for purchase, the tender offer cap for the 6% notes is $70,967,000. As a result, the proration factor used to determine the purchase amount for tendered 6% notes equals 8.87%.

Accordingly, the company expects to purchase about $38 million principal amount of the 6% notes tendered by the early tender date, according to a company press release.

As noted before, for each 1,000 principal amount, the total purchase price will be $1,172.50 for the 7% notes and $1,190.00 for the 6% notes. The total payments include a $30.00 consent fee for the 7% notes and a $30.00 early tender payment for the 6% notes.

Again, holders of 7% notes who tendered by the end of the offer will receive the total purchase price, which includes a consent payment.

The tender offer for the 6% notes will continue until midnight ET on Nov. 19. Those who tendered their notes by the early tender date will receive the total payment including the early tender premium. Those who tender after the early deadline will receive the total payment less the early tender premium.

Holders also will receive accrued interest up to but excluding the settlement date, which will be Nov. 5 for the 7% notes and Nov. 5 for 6% notes tendered by the early deadline.

The company also plans to execute a supplemental indenture to the 7% notes to eliminate substantially all of the restrictive covenants and events of default, the release noted.

The company needed to obtain consents from holders of at least a majority of the outstanding notes to amend the notes.

More offer details

The company said on Oct. 25 that its affiliate Odebrecht Finance lowered the minimum denomination for holders who tender its 7% notes.

The company said it would accept tenders for $1,000 and integral multiples of $1,000 after that, according to a previous press release. The minimum denomination was originally set at $100,000 and integral multiples of $1,000 after that.

Holders who wanted to tender less than $100,000 principal amount of the 7% notes needed to tender the entire principal amount of their holdings, the release noted.

The consent offer was conditioned on receiving consents for a majority of the notes.

The company priced a $450 million add-on to its 7 1/8% notes due June 26, 2042 at 116.266 to yield 5.95% on Oct. 23.

D.F. King & Co., Inc. (800 488-8035 or collect 212 269-5550) is the information agent. BB Securities Ltd. (collect +44 207 367 5832), BNP Paribas Securities Corp. (888 210-4358 or collect 212 841-3059), Banco Bradesco BBI SA (collect 212 888-9145), Citigroup Global Markets Inc. (800 558-3745 or collect 212 723-6108) and Mitsubishi UFJ Securities (USA), Inc. are the dealer managers and solicitation agents.

Odebrecht is an engineering, construction, chemical and petrochemical conglomerate based in Salvador da Bahia, Brazil.

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