By Angela McDaniels
Seattle, Jan. 4 - Petrobras International Finance Co. will reopen its $500 million issue of 6 1/8% notes due Oct. 6, 2016 to offer additional notes in exchange for its 12 3/8% global step-up notes due April 1, 2008, 9 7/8% senior notes due May 9, 2008, 9¾% senior notes due July 6, 2011, 9 1/8% global notes due July 2, 2013 and 7¾% global notes due Sept. 15, 2014.
Petrobras will accept for exchange up to $500 million of notes. If it receives more than that, the company said it will follow the priority illustrated in the table below and will prorate the lowest-priority series in order to reach the maximum size.
The offer expires at 5 p.m. ET on Feb. 1.
For each $1,000 principal amount of old notes, noteholders will receive $1,000 principal amount of new 6 1/8% notes plus a cash payment. In total, noteholders will receive an amount equal to the total exchange price, minus the reopen issue price of the reopening notes, plus accrued interest up to the settlement date for the old notes, minus accrued interest to the settlement date for the reopening notes.
The total consideration includes a $20 premium for noteholders who tender by 5 p.m. ET on Jan. 18.
There are $500 million of the 6 1/8% notes outstanding, which were priced in September at 99.557 via Morgan Stanley and UBS.
Petrobras will price the new 6 1/8% notes at 2 p.m. ET on Jan. 19 at a fixed spread of 140 basis points over the reference U.S. Treasury security. Had the notes been priced on Jan. 3, they would have priced at $1,003.44.
Morgan Stanley and UBS Investment Bank will be dealer managers.
Bank of New York NA (212 815-5788) is the exchange agent, and D.F. King & Co. (212 269-5550) is the information agent.
Petrobras International Finance is a subsidiary of Brazil-based Petroleo Brasileiro SA, a state-run oil company.
Hypothetical prices based on U.S. Treasury prices as of Jan. 3
| Priority | Security | Amount outstanding | Spread over U.S. Treasury | Hypothetical price
|
| 1 | 12 | 3/8% notes due 2008 | $134.622 million | 10 bps | $1,081.01
|
| 2 | 9 | 7/8% notes due 2008 | $238.246 million | 10 bps | $1,058.91
|
| 3 | 9¾% notes due 2011 | $286.356 million | 35 bps | $1,185.09
|
| 4 | 9 | 1/8% notes due 2013 | $498.335 million | 95 bps | $1,186.52
|
| 5 | 7¾% notes due 2014 | $600.000 million | 120 bps | $1,133.36
|
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