HSBC begins tender offer for three series issued by Brazil's Braskem

By Susanna Moon

Chicago, Jan. 17 - Brazil's Braskem Finance Ltd., a subsidiary of Braskem SA, said HSBC Securities (USA) Inc. began tender offers for three series of notes issued by Braskem Finance.

The company is tendering for any and all of Braskem's $130.22 million 8% notes due 2017 and its $500 million 7¼% notes due 2018.

In the maximum offer, the company is offering to purchase some of Braskem's $750 million of 7% notes due 2020 up to an amount equal to $500 million less the purchase amount of 8% notes and 7¼% notes, according to a press release by Braskem.

The outstanding amounts include $4,328,000 of 8% notes, $75,103,000 of 7¼% notes and $2.5 million of 7% notes held by Braskem or its affiliates.

The total purchase price for each $1,000 principal amount will be $1,156.25 for the 8% notes, $1,155 for the 7¼% notes and $1,105 for the 7% notes tendered by 5 p.m. ET on Jan. 30, the early tender date.

The total payment includes an early tender payment of $50 per $1,000 of notes.

The company also will pay accrued interest up to but excluding the settlement date.

Those who tender their notes after the early deadline will receive the total payment less the early tender amount.

The tender offers will end at midnight ET on Feb. 13. The offers were announced Jan. 16.

The offers are conditioned on the completion of financing but none of the offers is conditioned on the tender of any minimum principal amount of any series of notes.

Consent solicitations

The company also is soliciting the consents of the holders of the 7¼% notes and 7% notes to amend the notes to eliminate substantially all of the restrictive covenants and events of default.

The proposed amendments require the consents of holders of at least a majority of each series of outstanding notes, excluding those held by Braskem.

Holders who tender their 7¼% notes and 7% notes also will be providing consents.

The consent solicitations for the 7¼% notes and 7% notes may be terminated if the required consents are not obtained, but company may choose to accept and purchase the notes tendered under the concurrent tender offers.

More offer details

The tender offers and consent solicitations will allow Braskem to lengthen and smooth its debt maturity profile, a previous press release said. The 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.

The tender offers were scheduled to begin following the announcement of the terms of an expected financing deal by Braskem Finance. The company set talk on Thursday for an issue of dollar benchmark notes due 2017.

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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