Argentina’s Mastellone Hermanos launches tender and exchange offer

By Marisa Wong

Madison, Wis., June 5 – Mastellone Hermanos SA said it has begun an offer to purchase and exchange several series of notes.

The company is offering the following:

• Holders of its outstanding $124,413,141 series A collateralized senior refinancing notes due 2018 and $2,847,764 series C senior refinancing notes due 2018 may exchange for each $1,000 principal amount of existing notes, $950 of new series F notes due 2021 with a coupon of not less than 12%. If holders of the series A and series C notes tender their notes by the early participation date, they are eligible to receive an additional $50 million of the series F notes.

Holders of the series A and series C notes may also tender their notes for a $950 cash payment. Holders who tender their notes for purchase by the early participation deadline will receive an additional $50 early tender consideration;

• Holders of the company’s $650,113 series B collateralized senior refinancing notes due 2018 and $12,973,500 collateralized refinancing fixed-rate debt due 2018 may tender their notes for purchase. The tender consideration is a cash payment of $950 per $1,000 principal amount of series B notes or fixed-rate loan debt. There is a $50 early tender consideration for each $1,000 of series B notes or fixed-rate loan debt tendered by the early participation deadline; and

• Holders of the company’s $7 million series D collateralized senior refinancing notes due 2015 and $23,416,240 collateralized refinancing floating-rate debt due 2015 may tender their notes for purchase. Holders will receive a cash payment of $950 for each $1,000 of series D notes or floating-rate debt properly and the $50 early tender consideration if the notes are tendered by the early participation deadline.

The early participation deadline is 5 p.m. ET on June 18, and the expiration of the tender and exchange offer is 5 p.m. ET on July 1.

Tenders may be withdrawn prior to 5 p.m. ET on June 18.

Concurrent with the Rule 144A and Regulation S tender and exchange offer, the company will conduct a separate offering of new series F notes for cash.

The company intends to settle the concurrent offering immediately after the early participation deadline.

The offer for the existing debt is subject to a financing condition being satisfied on June 26. The company must issue at least $200 million of new series F notes under the exchange offer and the concurrent offering, and proceeds from the new notes under the concurrent offering must be in an amount not less than the sum of the total dollar amount corresponding to the tender consideration plus the early tender consideration and the amount required to redeem or cancel any existing debt not purchased or tendered under the tender and exchange offer.

Merrill Lynch, Pierce, Fenner & Smith Inc. (646 855-3401 or 888 292-0070) and Deutsche Bank Securities Inc. (212 250-2955 or 866 627-0391) are the dealer managers. Banco Santander Rio SA is the administrative agent. Bondholder Communications Group, LLC (attn.: Martha Herrera, mherrera@bondcom.com, 212 809-2663 or +44 20 7382 4580) is the information agent.

Mastellone Hermanos is a dairy company based in Buenos Aires.

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