Brazil prices tender for eight bond series, sets cap at $1.6 billion

By Susanna Moon

Chicago, July 24 – The Federative Republic of Brazil priced the tender offer for a maximum amount of eight series of bonds and set the maximum purchase amount at $1,597,377,000.

Of the first seven series, Brazil accepted all of the tendered notes for purchase as follows, according to a press release:

• $1.3 million of 8 7/8% global bonds due 2024 preferred tenders and $41,000 of non-preferred tenders;

• $2.75 million of 8 7/8% global bonds due 2024 preferred tenders;

• $19,354,000 of 8¾% global bonds due 2025 preferred tenders and $60,081,000 of non-preferred tenders;

• $62,617,000 of 10 1/8% global bonds due 2027 preferred tenders;

• $24,471,000 of 12¼% global bonds due 2030 preferred tenders;

• $264,943,000 of 8¼% global bonds due 2034 preferred tenders; and

• $740,436,000 of 7 1/8% global bonds due 2037 preferred tenders and $295,000 of non-preferred tenders.

Brazil also received preferred tenders for $675,998,000 of 5 5/8% global bonds due 2041 and accepted for purchase $421,089,000 of the bonds. Brazil received non-preferred tenders for $60.22 million of the 5 5/8% bonds and accepted none of those bonds for purchase.

Pricing set

The purchase price per $1,000 principal amount will be $1,413.23 for the two series of 8 7/8% bonds, $1,413.34 for the 8¾% bonds, $1,595.63 for the 10 1/8% bonds, $1,859.29 for the 12¼% bonds, $1,402.16 for the 8¼% bonds, $1,282.35 for the 7 1/8% bonds and $1,093.27 for the 5 5/8% bonds, according to a separate press release.

Pricing for each $1,000 principal amount of the outstanding notes was set using the 3 5/8% U.S. Treasury note due Feb. 15, 2044 plus a fixed spread as follows:

• $1,145,684,000 of 8 7/8% global bonds due 2024 plus 50 basis points;

• $95,037,000 of 8 7/8% global bonds due 2024 plus 50 bps;

• $1,043,516,000 of 8¾% global bonds due 2025 plus 66 bps;

• $1,396,058,000 of 10 1/8% global bonds due 2027 plus 84 bps;

• $466.45 million of 12¼% global bonds due 2030 plus 126 bps;

• $1,956,412,000 of 8¼% global bonds due 2034 plus 174 bps;

• $2,870,304,000 of 7 1/8% global bonds due 2037 plus 176 bps; and

• $2,925,000,000 of 5 5/8% global bonds due 2041 plus 173 bps.

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

The tender offer began at 6:30 a.m. ET on July 23 and ended at noon ET the same day for holders outside of Asia who do not submit an indication of interest and at 4 p.m. ET for holders outside of Asia who do submit an indication of interest, the press release noted.

Holders in Asia could submit tender orders until 11:59 p.m. ET on July 23, with settlement set for July 29.

The offer is conditioned on the pricing of a new issue of Brazil's global bonds due 2045.

Deutsche Bank Securities Inc. (attn: liability management group, 855 287-1922, outside U.S., call collect 212 250-7527, in Asia +65 6423 5934, e-mail US_Liability_Strategies_Team@list.db.com) is the billing and delivering bank. Deutsche Bank Securities Inc., Itau BBA USA Securities, Inc. (attn: debt capital markets / liability management, 888 770-4828, outside U.S., call collect 212 710-6749, in Asia +81-80-2336-5400, or e-mail IBBA_Syndicate@correio.itau.com.br) and BofA Merrill Lynch (attn: debt advisory, 888 292-0070, outside U.S., call collect 646-855-8988, in Asia 852-3508-7910) are the dealer managers.

The information agent is Bondholder Communications Group (212 809-2663 or 888 385-2663).

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