Brazil’s USJ offers PIK notes in exchange for 9 7/8% notes due 2019

By Susanna Moon

Chicago, March 15 – USJ Acucar e Alcool SA said it began a private exchange offer for its 9 7/8% senior notes due 2019 for newly issued 9 7/8%/12% senior secured pay-in-kind toggle notes due 2019.

Along with the exchange, the company is soliciting consents to amend the notes to eliminate substantially all of the restrictive covenants and some events of default, according to a company press release.

Holders who tender their notes and deliver their consents before 5 p.m. ET on March 28, the early date, will receive $650 for each $1,000 principal amount of notes accepted for exchange.

Those who tender their notes for exchange after the early deadline will receive $600 per $1,000 principal amount.

The exchange offer will end at 11:59 p.m. ET on April 11.

The amount of new notes will be issued in minimum denominations of $200,000 and in integral multiples of $1,000 after that and will be rounded down to the nearest $1,000.

Holders who tender their notes for exchange must also deliver consents to the proposed amendments.

Tendered notes may not be withdrawn and consents may not be revoked after execution of the supplemental indenture containing the proposed amendments to the notes indenture.

The exchange offer is conditioned on the tenders of at least 90% of the outstanding notes. The offer and solicitation are also subject to the perfection of the mortgage on the collateral securing the new notes and the receipt of required waivers from some creditors to permit the company to issue the new notes and perfect the mortgage on the collateral securing the new notes, the release noted.

The exchange offer is being made, and the new notes offered, only in the United States to holders who are qualified institutional buyers under Rule 144A or outside the United States to holders who are not U.S. persons under Regulation S.

D.F. King & Co., Inc. (212 269-5550 or 877 283-0318) is the information agent and the exchange agent.

USJ is a producer of sugar and ethanol.

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