Brazil sets pricing, cap in tender for numerous notes via new issue

By Susanna Moon

Chicago, Oct. 3 – The Federative Republic of Brazil set pricing in the one-day tender offer for a number of series of notes that was held Tuesday.

The maximum purchase amounts also were announced later in the day in a separate notice.

The issuer said on Tuesday that it was tendering for a maximum amount of the notes until noon ET that day for non-preferred tenders and until 4 p.m. ET the same day for preferred tenders.

The offer was contingent on the pricing of bonds due 2028, with some of the proceeds to be used to fund the offer as well as call some or all of the issuer’s 5 7/8% global notes due March 2019.

Brazil said on Wednesday that it had priced $3 billion principal amount of 4 5/8% global notes due 2028, with settlement expected to occur on Friday.

For the three series of fixed price bonds, the purchase amounts will be as follows with pricing for each $1,000 principal amount:

• $1,763,202,000 of 5 7/8% global bonds due 2019 with a purchase price of $1,052.13 and $52.37 million maximum purchase amount, consisting of $52.37 million preferred tenders tendered and accepted, $317,485,000 non-preferred tenders and no non-preferred tenders accepted;

• $772,848,000 of 8 7/8% global bonds due 2019 with a purchase price of $1,142.47 and $133,805,000 maximum purchase amount, consisting of $9,275,000 preferred tenders tendered and accepted and $124,530,000 of non-preferred tenders tendered and accepted; and

• $129,788,000 of 12Ύ% global bonds due 2020 with a purchase price of $1,247.13 and $43,143,000 maximum purchase amount, consisting of $3,143,000 preferred tenders tendered and accepted and $40 million of non-preferred tenders tendered and accepted.

The maximum purchase amounts are as follows for the remaining seven series with pricing set using the 2.25% Treasury note due Aug. 15, 2027 plus a fixed spread for a purchase price for each $1,000 principal amount as follows:

• $2,816,751,000 of 4 7/8% global bonds due 2021 with a spread of 25 basis points for a purchase price of $1,071.93 and $103,559,000 maximum purchase amount, consisting of $103,559,000 preferred tenders tendered and accepted, $39,598,000 non-preferred tenders and no non-preferred tenders accepted;

• $85,557,000 of 8 7/8% global bonds due 2024 with a spread of 139 bps for a purchase price of $1,296.10 and $45,362,000 maximum purchase amount, consisting of $35.98 million preferred tenders tendered and accepted and $9,382,000 of non-preferred tenders tendered and accepted;

• $1,074,392,000 of 8 7/8% global bonds due 2024 with a spread of 144 bps for a purchase price of $1,292.75 and $0 maximum purchase amount;

• $927,559,000 of 8Ύ% global bonds due 2025 with a spread of 161 bps for a purchase price of $1,303.45 and $239,358,000 maximum purchase amount, consisting of $119,143,000 preferred tenders tendered and accepted and $120,215,000 non-preferred tenders tendered and accepted;

• $2.5 billion of 6% global bonds due 2026 with a spread of 207 bps for a purchase price of $1,112.72 and $323,755,000 maximum purchase amount, consisting of $323,755,000 preferred tenders tendered and accepted, $2,948,000 non-preferred tenders and no non-preferred tenders accepted;

• $1,349,641,000 of 10 1/8% global bonds due 2027 with a spread of 186 bps for a purchase price of $1,465.47 and $511,675,000 maximum purchase amount, consisting of $511.56 million preferred tenders tendered and accepted and $115,000 non-preferred tenders tendered and accepted; and

• $366,522,000 of 12Ό% global bonds due 2030 with a spread of 255 bps for a purchase price of $1,680.39 and $126,208,000 maximum purchase amount, consisting of $1 million preferred tenders tendered and accepted and $125,208,000 non-preferred tenders tendered and accepted.

For the fixed price bonds, the purchase price was set using a U.S. Treasury rate of 2.325%, which is a yield to maturity based on the bid-side price of the reference U.S. Treasury security, according to a company update on Wednesday.

Settlement for the tender has been set for Oct. 10.

Deutsche Bank Securities Inc. (866 627-0391, 212 250-2955), Itau BBA USA Securities, Inc. (888 770-4828, 212 710-6749, +81-80-2336-5400 or IBBA_Syndicate@correio.itau.com.br) or Santander Investment Securities Inc. (855 404-3636 or 212 940-1442) are the dealer managers.

The information agent is DF King (dfking.com/brazil).

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