Brazil's Braskem tenders for three note series, seeks consents for two

By Toni Weeks

San Luis Obispo, Calif., Jan. 16 - Brazil's Braskem Finance Ltd., a subsidiary of Braskem SA, announced that HSBC Securities (USA) Inc. intends to launch tender offers for three notes series - 8% notes due 2017, 7¼% notes due 2018 and 7% notes due 2020 - issued by Braskem Finance. The tender offers will commence following the announcement of the terms of an anticipated financing transaction by Braskem Finance. The company set talk on Thursday for an issue of dollar benchmark notes due 2017.

According to a press release, in connection with the tender offers the company will also conduct consent solicitations for the 7¼% and 7% notes to eliminate substantially all of the restrictive covenants and various events of default and related provisions contained in the respective note indentures.

The outstanding principal amounts are $130.22 million of the 8% notes, $500 million of the 7¼% notes and $750 million of the 7% notes. Acceptance of the 8% and 7¼% notes will share top priority, with acceptance of the 7% notes having second priority.

The anticipated total consideration per $1,000 principal amount of notes is $1,156.25 for the 8% notes, $1,155 for the 7¼% notes and $1,105 for the 7% notes. Those amounts include an anticipated early tender payment of $50 plus accrued interest up to the settlement date.

The tender offers and consent solicitations will allow Braskem to lengthen and smooth its debt maturity profile, the release said. It is intended that notes purchased by HSBC in the offers will subsequently be sold to Braskem Finance, which will finance the note purchases with the proceeds from its upcoming financing transaction.

Each consent solicitation requires the consents of holders of at least a majority principal amount of the outstanding notes. The company said the consent solicitations may be terminated if the required consents are not obtained, in which case HSBC retains the right to complete the tender offers.

HSBC (888 HSBC-4LM or 212 525-5552), Banco Bradesco BBI SA (212 888-9145), Citigroup Global Markets Inc. (212 723-6106 or 800 558-3745), Credit Agricole Securities USA Inc. (866 807-6030) and Deutsche Bank Securities Inc. (866 627-0391 or 212 250-2955) will be the dealer managers and solicitation agents for the offers. Standard Chartered Bank will act as co-dealer manager.

Braskem is a Sao Paulo-based petrochemical company.

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