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

By Jennifer Chiou

New York, June 27 – Construtora Norberto Odebrecht SA affiliate Odebrecht Finance Ltd. announced the close of the tender offers for its $82.9 million of 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 press release, Odebrecht Finance also solicited 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 also solicited consents to eliminate substantially all of the restrictive covenants and various events of default and related provisions.

Consents were needed from the holders of a majority of a series of notes in order to amend that series, and Odebrecht said it will enter into a supplemental indenture for the 5.125% notes. It fell short of the needed consents for the 7% notes and 6% notes.

The company did not solicit consents from holders of the 4.375% notes.

The tender offers for the 7% notes, 5.125% notes and 6% notes expired at midnight ET on June 26.

As of that time, holders had tendered $10,171,000, or 12.2%, of the 7% notes, $456.98 million, or 76.1%, of the 5.125% notes and $18.92 million, or 15.7%, of the 6% notes.

The company said it will purchase all validly tendered 7% notes, 5.125% notes and 6% notes. Settlement was anticipated for June 27.

The offer for the 4.375% notes was subject to a cap equal to $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).

Based on the amount of other notes tendered, Odebrecht said it will not accept any 4.375% notes. The tender offer for the 4.375% notes was to expire at midnight ET on July 17.

For each $1,000 principal amount, the company will pay $1,065 for the 7% notes and $1,100 for the 5.125% notes and 6% notes. Each of these payments includes a $30.00 consent payment.

For the 4.375% notes, the company would have paid $985 per $1,000 principal amount of notes. This payment included a $30.00 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 were subject to conditions that included the issuance of $500 million principal amount of 5.25% notes due 2029 by Odebrecht Finance. No tender offer was 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 were Citigroup Global Markets Inc. (800 558-3745 or 212 723-6106), Deutsche Bank Securities Inc. (855 287-1922 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 was 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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