Brazil's Tevecap launches exchange for 12 5/8% notes due 2004

New York, Oct. 15 - Tevacap SA launched its exchange in which it is offering up to $48.022 million of 12 5/8% notes due 2009 for the $48.022 million of publicly held 12 5/8% notes due 2004.

Tevecap originally issued $250 million of the notes in 1996 but $201.978 million are now held by its subsidiary, TVA Communications Ltd. Since selling the notes, it has amended the indenture to eliminate the restrictive covenants.

The exchange runs through 5 p.m. ET on Nov. 10.

The offer is subject to 95% of the outstanding publicly held notes being tendered.

Tevecap said that if the offer is successful it will also exchange the notes held by TVA but on terms that are "materially less favorable."

The Sao Paolo, Brazil-based pay television operator said in a 424B1 filing with the Securities and Exchange Commission that if the exchange is unsuccessful noteholders will retain their limited rights. It added that it cannot give an assurance it will be able to pay principal and interest when due on Nov. 26.

The new notes will mature on Nov. 26, 2009 and will be amortized in three equal installments starting Nov. 26, 2007. They will be callable on any principal payment date at par.

No expiry date was set for the offer.

HSBC Bank USA NA is the exchange agent, and Eurovest Global Securities Inc. is the solicitation agent outside the United States while Unibanco - Uniao de Bancos Brasileiro SA is the global solicitation agent.

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