By Susanna Moon
Chicago, Aug. 16 – Andrade Gutierrez International SA said holders had tendered $344,706,000 principal amount, or 97.81%, of its $344,706,000 of outstanding 4% senior notes due 2018 in the exchange offer that ended at 11:59 p.m. ET on Aug. 15.
Andrade Gutierrez expects to issue $335,988,228.44 principal amount of new notes and to pay $136.54 for each $1,000 principal amount of notes tendered before 11:59 p.m. ET on Aug. 3 and elected to receive their pro-rata share of a cash pool totaling $37 million, according to a notice.
The actual amount of new notes that will be issued and the amount of cash that will be paid will be based on the final validation of tenders, the company noted.
Settlement is expected to occur on Aug. 20.
As previously announced, holders had tendered about $334.5 million principal amount, or 97.05%, of the notes as of the early deadline at 11:59 p.m. ET on Aug. 3.
Of the early tendered amount, 19% were exchanged for new notes, and 81% was tendered for a combination of cash and new notes.
The company began the exchange on July 20 by offering 11% senior secured notes due 2021 for the 4% notes.
The issuer then amended the terms on July 30 to offer 11%/12% senior secured pay-in-kind toggle notes due 2021.
As a result, the early deadline was pushed back from 11:59 p.m. ET on Aug. 1 “to reflect improved terms for the new notes.”
Other changes to the terms of the new notes included interest payments beginning Feb. 20, 2019, and an issuer option for the first interest payment period to pay interest on the new notes at the rate of 12% with interest payable entirely by capitalizing accrued interest on the first interest payment date and adding it to the principal amount of the new notes.
The issuer said the decision to amend the exchange offer came after talks with the largest holder of the notes and other “significant holders.”
Consent solicitation
As previously announced, Andrade Guttierrez is also soliciting consents to amend the note indenture in order to eliminate certain covenants and event-of-default provisions.
For each $1,000 principal amount of the 4% notes, the company will issue $1,015 principal amount of new notes.
The total on offer includes an early participation premium of $15 new notes per $1,000 principal amount that will only be issued to those who tender by the early participation time.
Andrade Gutierrez will also pay accrued interest in new notes.
Early participants could have chosen to receive cash instead of the $1,000 principal amount of new notes up to a maximum of $37 million of cash. Because this option was oversubscribed, the cash was allocated on a pro rata basis.
The early tender premium will only be paid in new notes.
The new notes will be guaranteed by Andrade Gutierrez Engenharia SA, formerly known as Construtora Andrade Gutierrez SA, Andrade Gutierrez Investimentos em Engenharia SA and AG Construcoes e Servicos SA. There will also be a guarantee up to $50 million by Zagope SGPS SA.
The guarantee will be secured by collateral consisting of a fiduciary assignment over the outstanding common shares of Andrade Gutierrez Engenharia owned by Andrade Gutierrez International. That stake is 99.99% of the total outstanding common stock of Andrade Gutierrez Engenharia. The guarantee will also be secured by a conditional fiduciary assignment to be granted by Andrade Gutierrez Concessoes SA and AGC Participacoes Ltda. over the outstanding common shares of CCR SA that they own, currently representing 14.86% of the common stock of CCR.
In order to make the changes requested under the consent solicitation, Andrade Gutierrez needed consents from holders of a majority of the notes. A tender of notes into the exchange was considered to be a consent to the amendments.
New notes will only be issued in denominations of $100,000 and $1,000 increments above that. Tenders that would result in the issuance of less than $100,000 of new notes will be rejected. Issuances of new notes will be rounded to the nearest $1,000 and any difference from rounding down will be paid in cash.
The exchange was subject to conditions including that at least 95% of the existing notes are tendered, which was met as of the early deadline.
D.F. King & Co., Inc. (212 269-5550, 866 342-4881 or ag@dfking.com) is the information and exchange agent.
Banco Bradesco BBI SA and Houlihan Lokey, Inc. are financial advisers.
The exchange was being carried out under Rule 144A and Regulation S.
Andrade Gutierrez is a Belo Horizonte, Brazil, subsidiary of Andrade Gutierrez SA, an engineering and construction company.
Exchange issue
| Issuer: | Andrade Gutierrez International SA
|
| Issue: | Senior secured pay-in-kind toggle notes
|
| Amount: | $335,988,228.44
|
| Maturity: | 2021
|
| Coupon: | 11% in cash/12% in kind
|
| Pricing date: | July 30
|
| Settlement date: | Aug. 20
|
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