By Angela McDaniels
Seattle, Jan. 22 - Petroleo Brasileiro SA (Petrobras) and its subsidiary Petrobras International Finance Co. determined the total exchange price they will pay per $1,000 principal amount of old notes tendered in their exchange offer for five series of outstanding notes and priced the $500 million of new 6 1/8% notes due Oct. 6, 2016 that will be offered in exchange, according to a news release.
The new 6 1/8 notes priced at $997.30 on Jan. 22 based on a fixed spread of 140 basis points over the 4 5/8% U.S. Treasury security due Nov. 15, 2016.
Petrobras originally priced $500 million of the 6 1/8% notes at $995.57 in September via Morgan Stanley and UBS and reopened the series in order to offer additional 6 1/8% notes to noteholders in exchange for old notes.
For each $1,000 principal amount of old notes, noteholders who exchange will receive $1,000 principal amount of new 6 1/8% notes plus a cash payment, which is noted in the table below. 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 tendered by Jan. 19, the early tender deadline.
The company said it had received tenders for $392 million of its outstanding notes as of the early tender deadline.
Specifically, Petrobras received tenders for $7.2 million of its 12 3/8% global step-up notes due April 1, 2008; for $12.9 million of its 9 7/8% senior notes due May 9, 2008; for $47.4 million of its 9¾% senior notes due July 6, 2011; for $123.7 million of its 9 1/8% global notes due July 2, 2013; and for $200.8 million of its 7¾% global notes due Sept. 15, 2014.
The final deadline for the offer is midnight ET on Feb. 2, which was pushed back from Feb. 1.
The company will accept for exchange up to $500 million of notes. If it receives more than that, Petrobras will follow the priority illustrated in the table below and will pro rate the lowest-priority series in order to reach the maximum size.
Bank of New York NA (212 815-5788) is the exchange agent, D.F. King & Co. (212 269-5550) is the information agent for the exchange offer and Morgan Stanley and UBS Investment Bank are the dealer managers for the reopened 6 1/8% notes.
Petrobras is a state-run oil company based in Brazil.
Exchange prices
| Priority | Security | Spread over U.S. Treasury | Cash payment | Interest | Total exchange price
|
| 1 | 12 | 3/8% notes due 2008 | 10 bps over the 4 | 5/8% due March 31, 2008 | $104.98 | $43.31 | $1,079.56
|
| 2 | 9 | 7/8% notes due 2008 | 10 bps over the 2 | 5/8% due May 15, 2008 | $63.60 | $24.14 | $1,057.41
|
| 3 | 9¾% notes due 2011 | 35 bps over the 5 | 1/8% due June 30, 2011 | $171.37 | $8.40 | $1,180.86
|
| 4 | 9 | 1/8% notes due 2013 | 95 bps over the 4½% due Aug. 15, 2013 | $172.42 | $8.87 | $1,181.44
|
| 5 | 7¾% notes due 2014 | 120 bps over the 4.25% due Aug. 15, 2014 | $120.46 | $30.57 | $1,107.78
|
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