Brazil’s Banco BMG ups cap, accepts all tendered 8 7/8%, 9.95% notes

By Marisa Wong

Morgantown, W.Va., Oct. 6 – Brazil’s Banco BMG SA said it increased the maximum acceptance amount under the tender offer for its 8 7/8% subordinated notes due 2020 to $101,899,000. As a result, the bank was able to accept all 8 7/8% notes as well as all 9.95% subordinated notes due 2019 tendered in the offers that expired at midnight ET on Oct. 5.

Banco BMG had announced the tender on Sept. 8, saying it was offering to purchase up to $100 million of the 8 7/8% notes and an amount of the 9.95% notes capped at $100 million less the total principal amount of 8 7/8% notes accepted for purchase.

As of 5 p.m. ET on Sept. 21, the early tender date, the bank had received tenders for $50,207,000 of its 8 7/8% notes and $42,312,000 of its 9.95% notes. All of the early tendered 8 7/8% notes had been accepted for purchase on Sept. 23.

According to a press release on Tuesday, holders had tendered an additional $4,923,000 of 8 7/8% notes and an additional $4,457,000 of 9.95% notes by the expiration date.

The additional $4,923,000 of tenders of 8 7/8% notes and the $46,769,000 total tenders of 9.95% notes will settle on Oct. 7.

Holders who tendered their notes by the early tender date for both offers are eligible to receive the total consideration. The total consideration is $915 for each $1,000 of 8 7/8% notes and $945 for each $1,000 of 9.95% notes. The total consideration includes an early tender payment of $30 for each $1,000 of notes.

Holders tendering after the early deadline will only be eligible to receive the tender offer consideration, which is $885 for the 2020 notes and $915 for the 2019 notes.

The issuer will also pay accrued interest up to the applicable settlement date.

The aggregate consideration paid for the early tendered 8 7/8% notes was $45,939,405, and the amount to be paid for the final tendered 8 7/8% notes is $4,356,855. The aggregate consideration to be paid for the early tendered 9.95% notes is $39,984,840, and the amount to be paid for the final tendered 9.95% notes is $4,078,155.

Neither offer was conditioned on the tender of any minimum principal amount of notes.

As of Sept. 8, there was $219.8 million principal amount of the 2020 notes outstanding, which excludes $15.3 million held by Banco BMG, and $293.8 million principal amount of the 2019 notes outstanding, which excludes $6.2 million held by the bank.

The trustee for the notes is Deutsche Bank Trust Co. America. Itau BBA USA Securities, Inc. (attn.: syndicate desk, 888 770-4828) and Morgan Stanley & Co. LLC (attn.: liability management, 800 624-1808 or 212 761-1057) are acting as dealer managers for the offer. D. F. King & Co., Inc. (bmg@dfking.com, banks and brokers at 212 269-5550, toll free at 800 622-1573) is acting as the tender agent and information agent.

The bank is based in Sao Paulo.

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