Sabesp tenders for 12% notes due 2008

By Jennifer Chiou

New York, Oct. 5 - Companhia de Saneamento Básico do Estado de São Paulo (Sabesp) began a tender offer for its $225 million of 12% notes due 2008, according to a 6-K filing with the Securities and Exchange Commission.

The São Paulo, Brazil, water and sewage service provider is also seeking consents to proposed amendments to eliminate substantially all of the restrictive covenants and related provisions contained in the note indenture.

The consent deadline is 5 p.m. ET on Oct. 19 and the tender ends at midnight ET on Nov. 2.

The company said it will determine its payout by reference to the yield to maturity on the bid-side price of the 4.625% Treasury due Sept. 30, 2008 and a fixed spread of 50 basis points. Pricing will be fixed at 2 p.m. ET on Oct. 19.

Those who tender by the consent deadline will receive a consent payment of $20.00 per $1,000 principal amount of notes. Sabesp said it will also pay accrued interest to the payment date.

Those who tender their notes must deliver consents.

The company is seeking consents from a majority of noteholders.

Deutsche Bank Securities is the dealer manager and solicitation agent (866 627-0391 or call collect 212 250-2955). Global Bondholder Services Corp. is the information agent and depositary (866 873-5600 or call collect 212 430-3774).

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