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Brazil's Rede Energia begins tender offer for 11 1/8% perpetual notes
By Angela McDaniels
Tacoma, Wash., June 1 - Rede Energia SA has begun a tender offer to purchase the maximum principal amount of its outstanding 11 1/8% perpetual notes that it can purchase for the dollar equivalent of R$300 million, according to a company news release.
The payment per $1,000 principal amount of notes will be determined based on a formula consisting of a base price of $450 - which includes an early tender payment of $50 - plus a clearing premium of no more than $80 to be determined under a modified Dutch auction procedure.
The company will also pay accrued interest up to but excluding the settlement date.
Only holders who tender by the early tender date of 5 p.m. ET on June 12 will receive the early tender payment.
The clearing premium selected by Rede Energia will be the lowest single premium for all tenders that will allow it to spend the maximum payment amount by accepting all tendered notes with bid premiums equal to or lower than such clearing premium.
Bid premiums must be specified in increments of $2.50.
If the total amount of notes tendered at or below the clearing premium would cause Rede Energia to spend more than the maximum payment amount, then holders of the notes tendered at the clearing premium will be subject to proration.
The offer expiration date is midnight ET on June 26.
The company plans to use a portion of the proceeds of the issuance of R$320 million of promissory notes to fund the offer. Rede Energia said it has received a firm commitment from a Brazilian financial institution for the promissory notes.
The dealer managers are Banc of America Securities LLC (888 292-0070 toll free or 646 855-3401 collect from outside the United States) and Planner Securities LLC (646 381-7001 collect from outside the United States).
Global Bondholder Services Corp. (866 804-2200) is the information agent.
Rede Energia, fomerly Rede Empresas de Energia Eletrica SA, is an electricity holding company based in Sao Paulo, Brazil.
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