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Banco do Brasil forgoes swapping out 8˝% perpetuals in exchange offer
By Susanna Moon
Chicago, Oct. 22 – Banco do Brasil SA, Grand Cayman Branch said it will accept none of the tendered 8˝% perpetual non-cumulative junior subordinated securities in the exchange offer that ended at 11:59 p.m. ET on Oct. 21.
“Despite significant investor interest in the exchange offer, the issuer has determined that developments in the current market environment would or might impair the issuer from realizing the liquidity levels it anticipated for its investors through the exchange offer,” according to a press release.
In exchange for the tendered perpetuals, the bank had offered to issue new 8˝% perpetual non-cumulative junior subordinated securities, as previously announced.
The exchange offer for the outstanding $1.5 billion of securities began Sept. 24.
The exchange price was set at $1,180 per $1,000 principal amount regardless of when the notes were tendered in the offer.
The company extended the total payment to all holders who exchange their 8˝% perpetual non-cumulative junior subordinated securities on Oct. 7.
Before the change, the total exchange price would only have been paid to holders who tendered their notes by 5 p.m. ET on Oct. 6, the early exchange date.
The total exchange value included an early exchange payment of $30 per $1,000 of securities.
Also, soliciting dealers could have been eligible to receive a soliciting dealer fee of $1.50 per $1,000 principal amount.
The exchange offer was conditioned on a minimum of $500 million principal amount of the new securities being issued in the offer, as previously noted.
The information agent and exchange agent was D.F. King & Co., Inc. (banks and brokers 212 269-5550, others 877 283-0319, attn: Krystal Scrudato, e-mail bb@dfking.com).
Banco do Brasil is a lender based in Brasilia, Brazil.
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