Brazil's Tevecap exchanges 84.6% of 12 5/8% notes due 2004

New York, Dec. 14 - Tevecap SA said it has completed its exchange offer for its publicly held 12 5/8% notes due 2004, accepting tenders of $40.6 million or 84.6% of the $48.022 million securities.

Following delivery of the new notes, Tevecap intends to add guarantees from some of its subsidiaries and to exchange notes held by its subsidiaries.

On Dec. 8 Tevecap waived the minimum participation condition to the exchange. The company also said it does not intend to extend the offer past its current expiration of 5 p.m. ET on Dec. 10.

Previously Tevecap had required that 95% of the outstanding publicly held notes being tendered.

As of 1 p.m. ET on Dec. 8, holders had tendered $38.8 million or 80.7% of the existing notes.

At the last announcement on Nov. 29 Tevecap again extended the exchange. In addition, the company said it has defaulted on the principal payment.

As of the old expiration date of 5 p.m. ET on Nov. 26, holders had tendered $38.8 million of the notes, up from $38.6 million at the last report on Nov. 23.

Tevecap also said it will not pay the $48.022 million of principal due at the maturity date of Nov. 26.

Tevecap launched the exchange on Oct. 15.

It 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.

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.

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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