Brazil's Braskem solicits consents to amend 11¾% notes due 2014

By Marisa Wong

Madison, Wis., Oct. 7 - Braskem SA and its financing subsidiary Braskem Finance Ltd. announced that they are soliciting consents from holders of their $250 million of outstanding 11¾% notes due 2014 to amend certain provisions to the notes agreement dated July 16, 2003.

The issuers are seeking consents to the proposed amendments in order to, among other things, substantially conform certain provisions of the notes agreement to the corresponding provisions in the indenture dated May 7, 2010, under which $750 million of Braskem Finance's 7% notes due 2020, which are guaranteed by Braskem, were issued.

If adopted, the proposed amendments would result in substantially similar covenants for the 11¾% notes and the 7% notes, which will provide more operating flexibility and be less restrictive to the issuers. The amendments would also allow either of the issuers to be substituted or released in their capacity as an issuer under certain conditions.

The consent solicitation began on Thursday and will expire at 5 p.m. ET on Oct. 21.

Only holders of record as of 5 p.m. ET on Oct. 6 are entitled to deliver consents. In order to execute the amendment, the issuers must receive consents from holders of record of a majority of the 11¾% notes.

If an amendment is executed, holders who deliver their consents prior to the expiration time will receive a cash payment within five business days of the expiration time equal to $2.50 per $1,000 of notes.

Holders who deliver consents will be able to revoke their consent at any time prior to the execution of the amendment.

The solicitation agent is Citigroup Global Markets Inc. (212 723-6108 or 800 558-3745), and the information agent is D.F. King & Co., Inc. (212 269-5550 or 800 628-8536).

Braskem is a petrochemical company based in Sao Paulo.

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