Brazil’s Odebrecht begins tender offers for four series of notes

By Angela McDaniels

Tacoma, Wash., June 19 – Construtora Norberto Odebrecht SA affiliate Odebrecht Finance Ltd. began tender offers for its $82.9 million outstanding 7% senior notes due 2020, $600 million outstanding 5.125% notes due 2022, $120.5 million outstanding 6% notes due 2023 and $518.6 million outstanding 4.375% notes due 2025, according to a company news release.

The company is offering to purchase any and all of the 7% notes, 5.125% notes and 6% notes and a maximum principal amount of 4.375% notes. The cap for the 4.375% notes is $500 million less the total consideration (excluding accrued interest) to be paid for the 5.125% notes and 6% notes less $88.3 million (which is roughly equal to the principal amount of outstanding 7% notes multiplied by the total consideration (excluding accrued interest) to be paid for 7% notes under the tender offer).

If the amount of 4.375% notes tendered exceeds the cap, they will be subject to proration.

Odebrecht Finance is also soliciting the consents of the holders of the 7% notes, the 5.125% notes and the 6% notes to amend the indentures governing those notes to allow the issuer to be replaced and substituted as principal debtor by Construtora Norberto Odebrecht, Odebrecht SA or any wholly owned subsidiary of those two companies.

In the case of the 5.125% notes, the company is also soliciting consents to eliminate substantially all of the restrictive covenants and various events of default and related provisions.

Consents are needed from the holders of a majority of a series of notes in order to amend that series. Holders who tender 7% notes, 5.125% notes or 6% notes will also be providing consents.

The company is not soliciting consents from holders of the 4.375% notes.

For each $1,000 principal amount, the company is offering $1,065 for the 7% notes and $1,100 for the 5.125% notes and 6% notes. Each of these payments includes a $30 consent payment.

For the 4.375% notes, the company is offering $985 per $1,000 principal amount of notes. This payment includes a $30 early tender payment for each note tendered by the early tender date, 5 p.m. ET on July 2.

Holders will also receive accrued interest up to but excluding the settlement date.

The tender offers for the 7% notes, 5.125% notes and 6% notes will expire at midnight ET on June 26. The tender offer for the 4.375% notes will expire at midnight ET on July 17.

The tender offers are subject to conditions that include the issuance of $500 million principal amount of 5.25% notes due 2029 by Odebrecht Finance. No tender offer is conditioned on the tender of any minimum principal amount of notes of that series of notes or any other series.

The dealer managers and solicitation agents are Citigroup Global Markets Inc. (800 558-3745 or 212 723-6106), Deutsche Bank Securities Inc. (855287-1922 or 212 250-7527), Itau BBA USA Securities, Inc. (888 770-4828), J.P. Morgan Securities LLC (866 846-2874 or 212 834-7279), Mitsubishi UFJ Securities (USA), Inc. (877 744-4532 or 212 405-7481) and Santander Investment Securities Inc. (212 407-0995).

The information agent is D.F. King & Co., Inc. (800 769-7666 or 212 269-5550).

Construtora Norberto Odebrecht is an engineering and construction company based in Sao Paulo.

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