Brazil's BRF extends early payment date in swap offer for two series

By Susanna Moon

Chicago, June 5 - BRF SA said its subsidiary Sadia Overseas Ltd. extended the early participation deadline in the exchange offer for its 6 7/8% notes due 2017 and subsidiary BFF International Ltd.'s outstanding 7¼% senior notes due 2020.

A noted before, the company is offering up to $150 million principal amount of new 3.95% senior notes due 2023 in exchange for tendered notes. Both note series to be exchanged are guaranteed by Brasil Foods.

Holders may now tender their notes by the end of the offer at midnight ET on June 18 to receive the total purchase price. The early participation date was originally set for June 4. The offer began May 20.

Now holders will receive $1,000 of 3.95% notes plus $140.25 in cash and a $30.00 early participation payment for each $1,000 principal amount of 6 7/8% notes, regardless of when the notes are tendered in the offer.

For each $1,000 principal amount of the 7¼% notes, holders will receive $1,000 of 3.95% notes plus $201.25 in cash and the $30.00 early participation payment.

As of the close of business on June 4, holders had tendered $23,879,000 6 7/8% notes and $85,315,000 7¼% notes.

Before the change, those who tendered after the early participation date would have received the total payment less the early participation payment.

The 6 7/8% notes will have first priority of acceptance, and the 7¼% notes will have second priority in the offer. The offer is conditioned on the exchange of at least $20 million of 7¼% notes, as noted before. The amount of 3.95% notes issued in the exchange offers will be capped at $150 million.

Tendered notes may no longer be withdrawn, as of the original early tender deadline.

Consent solicitation

In addition, holders representing $11,237,000 6 7/8% notes tendered their consents in the related solicitation by Sadia Overseas, according to a company press release.

Concurrently with the exchange offers, Brasil Foods and Sadia are soliciting consents from holders of the 6 7/8% notes to adopt amendments to the indenture governing the notes to alter terms of the covenants and related definitions and events of default so that they are the same as those of the new 3.95% notes. The proposed amendments, which, if approved, will apply to notes that remain outstanding after the conclusion of the exchange offer and will require the consents of holders representing a majority of the principal amount of the 6 7/8% notes, excluding any notes held by Brasil Foods or its affiliates.

Holders who tender their notes in the exchange offers will be deemed to have consented to the proposed amendments. Holders who do not want to tender their 6 7/8% notes may still deliver consents and will receive a consent payment of $1.00 per $1,000 principal amount of notes.

D.F. King & Co., Inc. (800 549-6746 or 212 269-5550) is the information agent.

BRF is a food company based in Itajai, Brazil.

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