Brazil begins tender offer for R$6.4 billion 12½ bonds due 2016, 2022

By Susanna Moon

Chicago, April 17 - The Federative Republic of Brazil said it began a cash tender offer for its R$3.4 billion of outstanding 12½ bonds due 2016 and R$3 billion of outstanding 12½ bonds due 2022. The offer may take place in two parts.

The maximum purchase price in the offer will be set by 6:30 a.m. ET on April 18 and will not exceed 50% of the principal amount of the country's new issue of bonds due 2024, according to a press release.

The initial tender period will begin at 7 a.m. ET on April 18 and end at 4 p.m. ET later that day.

During this period, holders may place orders to tender bonds with Goldman Sachs & Co. or HSBC Securities (USA) Inc., the dealer managers for the offer.

For each R$1,000 principal amount, the issuer will pay R$1,205 for the bonds due 2016 and R$1,300 for the bonds due 2022.

Holders will also receive accrued interest up to but excluding the settlement date.

The bonds will be accepted for purchase, subject to proration, at 7:30 a.m. ET on April 19.

During the initial tender period only, priority will be given to initial tender orders submitted by holders who place firm orders for new bonds during the offering of new bonds, the release noted. The priority will apply, for each tendering holder, with respect to an amount of initial tender orders having a purchase price equal to the amount of new bonds ordered by the holder.

Subsequent tender period

The subsequent tender period, if needed, will begin at 9 a.m. ET on April 19 and run until the earlier of 4 p.m. ET on April 20 and the time that the issuer receives tenders equal to the offer cap.

During each business day of the subsequent tender period, holders may tender their bonds to either of the dealer managers between 9 a.m. ET and 4 p.m. ET until the offer cap is reached or the offer is terminated. Tendered notes during this period will be accepted on a first-come basis, the release said.

Pricing for the subsequent tender period will be announced at a later date.

Holders may tender their bonds only through one of the dealer managers, Goldman Sachs (800 828-3182 or +44 20 7774 4799) or HSBC (888 472-2456 or +44 20 7992 6237). D.F. King & Co., Inc. (800 488-8035 or, for banks and brokers, call collect 212 269-5550) is the information agent.

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