Banco do Brasil wraps oversubscribed offers, extends payment for third

By Susanna Moon

Chicago, Nov. 25 – Banco do Brasil SA announced the early tender results in the cash offer to purchase up to $600 million of three series of notes and amended the terms of one of the offers.

As announced Nov. 10, the bank is offering to purchase up to $300 million of its $2,485,200,000 outstanding 9% perpetual non-cumulative junior subordinated notes, up to $300 million of its $1.75 billion outstanding 9¼% perpetual non-cumulative junior subordinated notes and up to $100 million of its $1,918,500,000 outstanding 3 7/8% senior notes due 2022.

As of 5 p.m. ET on Nov. 24, the early tender date, investors had tendered $504,177,000 principal amount of 9% notes, $73,057,000 principal amount of 9¼% notes and $572,084,000 principal amount of 3 7/8% notes, according to a company notice.

The bank said it amended the terms of the tender offer for the 9¼% notes so that holders who tender their notes after the early deadline also will receive the total purchase price of $777.50 per $1,000 principal amount.

Each series of notes is subject to its tender cap, but the offers are subject to the overall tender cap of $600 million.

The notes will be accepted in order of priority: first the 9% perpetuals, second the 9¼% perpetuals and third the 3 7/8% notes.

The bank said it accepted for purchase 12.1% of the outstanding 9% notes on a prorated basis up to the offer cap and will buy back no more of the notes in the offer.

In the second offer, the bank will settle tenders for all of the 4.17% of outstanding of 9¼% notes.

For the 3 7/8% notes, the bank will purchase 5.2% of the outstanding notes on a prorated basis up to the offer cap and will accept no more of those tendered notes for purchase.

For the oversubscribed offers, tendered notes that would have resulted in a minimum denomination below $200,000 after proration were fully accepted, the bank noted.

As previously announced, the total purchase price for each $1,000 principal amount will be $752.50 for the 9% perpetuals, $777.50 for the 9¼% perpetuals and $872.50 for the 3 7/8% notes.

The total amount includes a $30.00 early tender premium per $1,000 principal amount of 9% notes and 3 7/8% notes tendered by the early tender deadline.

For the 9% notes and 3 7/8% notes, those who tender after the early deadline will receive the tender offer payment, which is the total amount less the early tender premium.

As amended, the total payment in the offer for the 9¼% perpetuals will be paid to holders regardless of when notes are tendered in the offer.

The issuer will also pay accrued interest to but excluding the settlement date, which will be Nov. 30 for early tendered notes and the final settlement date expected to occur two business days after the offers end.

The tender offer for the 9¼% perpetuals will continue until 11:59 p.m. ET on Dec. 9.

Tendered notes may no longer be withdrawn as of the early tender deadline.

The offers are not conditioned on the tender of any minimum amount of notes or on any financing.

BB Securities Ltd. (+44 (20) 7367-5800), Citigroup Global Markets Inc. (800 558-3745, 212 723-6106) and J.P. Morgan Securities LLC (866 846-2874, 212 834-7279) are the dealer managers for the offers. D. F. King & Co., Inc. (banks and brokers 212 269-5550, all others 800 591-8269; +44 20 7920 9700 in London; +852 3953 7230 in Hong Kong; bb@dfking.com) is the tender agent and information agent.

The bank is based in Brasilia, Brazil.

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