By Angela McDaniels
Tacoma, Wash., Sept. 13 – Petroleo Brasileiro SA (Petrobras) subsidiary Petrobras Global Finance BV set pricing in its tender offers and private exchange offers for seven series of notes, according to a company news release.
As previously reported, the offers apply to the following notes, which are listed in order of acceptance priority level:
• $1,500,414,000 outstanding 4 3/8% global notes due May 2023;
• $1,984,522,000 outstanding 6¼% global notes due March 2024;
• $2,661,378,000 outstanding 5.299% global notes due January 2025;
• $2,962,000,000 outstanding 8¾% global notes due May 2026;
• $3,391,069,000 outstanding 7 3/8% global notes due January 2027;
• $4,790,114,000 outstanding 5.999% global notes due January 2028; and
• $2,623,099,000 outstanding 5¾% global notes due February 2029.
For each series, the amount of cash and the principal amount of new notes to be issued in exchange for each $1,000 principal amount of existing notes is noted in the table below.
With respect to the notes with acceptance priority levels 1 through 5, the cash amount is equal to 50% of the applicable consideration. With respect to the notes with acceptance priority levels 6 and 7, the cash amount is equal to 30% of the applicable consideration.
The considerations were calculated based on a fixed spread plus the yield of a reference U.S. Treasury as of 2 p.m. ET on Sept. 13.
The fixed spreads are noted in the table. For the 4 3/8% notes, 6¼% notes and 5.299% notes, the reference Treasury was the 1.25% Treasury due Aug. 31, 2024. For the remaining notes, the reference Treasury was the 1.625% Treasury due Aug. 15, 2029.
In the tender offers, holders will receive an amount in cash equal to the total considerations noted in the table below.
In each case, the company will also pay accrued interest in cash.
Holders who are either (i) qualified institutional buyers within the meaning of Rule 144A under the Securities Act or (ii) non-U.S. persons (as defined in Rule 902 under the Securities Act) located outside the United States within the meaning of Regulation S under the Securities Act are not permitted to participate in the cash offers. All other holders of the old notes are eligible to participate; participating holders are required to certify that they are retail holders.
New notes
The new notes will mature Jan. 15, 2030 and will carry a 5.093% coupon, which was calculated as the sum of the yield of the 1.625% Treasury due 2029 plus 322 basis points.
The new notes’ issue price is par plus accrued interest, if any, from Sept. 18.
The new notes may be redeemed, in whole or in part, prior to maturity at a make-whole price calculated based on a benchmark Treasury plus 50 bps.
Other offer terms
The offers will expire at 5 p.m. ET on Sept. 13.
Notes may be delivered for exchange under guaranteed delivery procedures until 5 p.m. ET on the second business day after the expiration date.
Settlement for each offer is expected to be Sept. 18.
Petrobras Global Finance said it will not complete the exchange offers if the aggregate principal amount of new notes to be issued in the exchange offers is less than $1 billion.
Each exchange offer is conditioned on the aggregate cash amount payable for all old notes tendered in the exchange offers not exceeding $3 billion and on the maximum cash amount being sufficient to pay the cash amount for all tendered old notes of that series.
The exchange offers are also conditioned on the concurrent cash tender offers; this condition is not waivable.
Each cash offer is conditioned on the aggregate tender consideration payable for all old notes not exceeding $500 million and on the maximum consideration being sufficient to pay the aggregate tender consideration for all old notes.
The cash offers are also conditioned on completion of the exchange offers, which is a non-waivable condition.
The dealer managers are Citigroup Global Markets Inc., Credit Agricole Securities (USA) Inc., HSBC Securities (USA) Inc., Mizuho Securities USA LLC, Morgan Stanley & Co. LLC and Santander Investment Securities Inc.
Global Bondholder Services Corp. (866 470-3800, 212 430-3774 or https://gbsc-usa.com/eligibility/Petrobras) is the information agent, the tender agent and the exchange agent.
Petrobras is an oil and gas company based in Rio de Janeiro.
| Notes | Fixed spread | Offer yield | Cash amount | New notes | Total consideration
|
| 4 | 3/8% global notes due 2023 | 140 bps | 3.126% | $521.49 | $521.49 | $1,042.98
|
| 6¼% global notes due 2024 | 173 bps | 3.456% | $557.72 | $557.73 | $1,115.45
|
| 5.299% global notes due 2025 | 178 bps | 3.506% | $543.42 | $543.43 | $1,086.85
|
| 8¾% global notes due 2026 | 243 bps | 4.303% | $627.86 | $627.86 | $1,255.72
|
| 7 | 3/8% global notes due 2027 | 249 bps | 4.363% | $593.57 | $593.58 | $1,187.15
|
| 5.999% global notes due 2028 | 269 bps | 4.563% | $329.64 | $769.16 | $1,098.80
|
| 5¾% global notes due 2029 | 281 bps | 4.683% | $324.04 | $756.08 | $1,080.12
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