Brazil prices one-day capped tender for numerous notes via new issue

By Susanna Moon

Chicago, Oct. 3 – The Federative Republic of Brazil set pricing in the one-day tender offer for a number of series of notes that was held Tuesday.

Pricing for seven of the series of notes covered by the offer was set using the U.S. Treasury 2.25% note due Aug. 15, 2027 plus a fixed spread for a purchase price for each $1,000 principal amount as follows:

• $2,816,751,000 of 4 7/8% global bonds due 2021 with a spread of 25 basis points for a purchase price of $1,071.93;

• $85,557,000 of 8 7/8% global bonds due 2024 with a spread of 139 bps for a purchase price of $1,296.10;

• $1,074,392,000 of 8 7/8% global bonds due 2024 with a spread of 144 bps for a purchase price of $1,292.75;

• $927,559,000 of 8Ύ% global bonds due 2025 with a spread of 161 bps for a purchase price of $1,303.45;

• $2.5 billion of 6% global bonds due 2026 with a spread of 207 bps for a purchase price of $1,112.72;

• $1,349,641,000 of 10 1/8% global bonds due 2027 with a spread of 186 bps for a purchase price of $1,465.47; and

• $366,522,000 of 12Ό% global bonds due 2030 with a spread of 255 bps for a purchase price of $1,680.39.

The purchase price was set using a U.S. Treasury rate of 2.325%, which is a yield to maturity based on the bid-side price of the reference U.S. Treasury security, according to a company update on Wednesday.

For the three series of fixed price bonds, the purchase price for each $1,000 principal amount will be as follows:

• $1,763,202,000 of 5 7/8% global bonds due 2019 with a purchase price of $1,052.13;

• $772,848,000 of 8 7/8% global bonds due 2019 with a purchase price of $1,142.47; and

• $129,788,000 of 12Ύ% global bonds due 2020 with a purchase price of $1,247.13.

The issuer said on Tuesday that it was tendering for a maximum amount of the notes until noon ET that day for non-preferred tenders and until 4 p.m. ET the same day for preferred tenders.

The maximum purchase amount in the offer will be set by Brazil, according to the previous announcement.

The offer is contingent on the pricing of bonds due 2028, with some of the proceeds to be used to fund the offer as well as call some or all of the issuer’s 5 7/8% global notes due March 2019.

Brazil said on Wednesday that it had priced $3 billion principal amount of 4 5/8% global notes due 2028. Settlement is expected to occur on Friday.

Settlement for the tender has been set for Oct. 10.

Deutsche Bank Securities Inc. (866 627-0391, 212 250-2955), Itau BBA USA Securities, Inc. (888 770-4828, 212 710-6749, +81 80 2336-5400 or IBBA_Syndicate@correio.itau.com.br) or Santander Investment Securities Inc. (855 404-3636 or 212 940-1442) are the dealer managers.

The information agent is DF King (dfking.com/brazil).

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