Brazil plans to buy back $4 billion of foreign currency bonds

By Reshmi Basu

New York, June 5 - The Brazilian government announced its plans to buy back up to $4 billion of dollar-denominated and euro-denominated bonds for cash via a modified Dutch auction.

The country will repurchase 17 dollar-denominated bonds and three euro-denominated bonds with maturities ranging from 2007 to 2030.

The principal amount to be paid for the bonds will be based on the applicable reference yield plus a fixed clearing spread. The reference yields will be the interpolated dollar or euro swap rate.

The tender offer will expire at 5 p.m. ET on June 8.

The results will be announced at 10 a.m. ET on June 9 or soon after.

The eligible dollar-denominated bonds along with the maximum clearing spread are:

• $610 million of 10% global bonds due 2007 at a maximum clearing spread of 13 basis points;

• $1.015 billion of 11¼% global bonds due 2007 at a maximum clearing spread of 39 basis points;

• $620 million of 11½% global bonds due 2008 at a maximum clearing spread of 54 basis points;

• $1.044 billion of 9 3/8% global bonds due 2008 at a maximum clearing spread of 45 basis points;

• $522 million of floating-rate notes due 2009 at a maximum clearing spread of 68 basis points;

• $1.279 billion of 14½% unsecured global bonds due 2009 at a maximum clearing spread of 66 basis points;

• $641 million of 12% global bonds due 2010 at a maximum clearing spread of 94 basis points;

• $1.237 billion of 9¼% global bonds due Oct. 22, 2010 at a maximum clearing spread of 97 basis points;

• $1.25 billion of 10% global bonds due 2011 at a maximum clearing spread of 122 basis points;

• $1.25 billion of 11% global bonds due 2012 at a maximum clearing spread of 133 basis points;

• $1.25 billion of 10¼% global bonds due 2013 at a maximum clearing spread of 155 basis points;

• $1.25 billion of 10¼% global bonds due 2014 at a maximum clearing spread of 172 basis points;

• $1.25 billion of 12¾% global bonds due 2020 at a maximum clearing spread of 215 basis points;

• $2.15 billion of 8 7/8% global bonds due 2024 at a maximum clearing spread of 226 basis points;

• $825 million of 8 7/8% global bonds due 2024, series B at a maximum clearing spread of 228 basis points;

• $3.5 billion of 10 1/8% unsecured global bonds due 2027 at a maximum clearing spread of 227 basis points; and

• $1.452 billion of 12¼% global bonds due 2030 at a maximum clearing spread of 250 basis points.

The eligible euro-denominated bonds include:

• €637 million of 9½% notes due 2007 at a maximum clearing spread of 50 basis points;

• €450 million of 11½% notes due 2009 at a maximum clearing spread of 65 basis points; and

• €606 million of 11% notes due 2010 at a maximum clearing spread of 80 basis points.

D.F. King & Co., Inc. is information agent (call collect 212 269-5550). Dealer managers are Credit Suisse (800 820-1653 or 4420 7883 6748) and Morgan Stanley (800 624-1808 or call collect 212 761-1864).

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