Petrobras prices offers to purchase notes for up to $3.5 billion

By Wendy Van Sickle

Columbus, Ohio, April 7 – Brazil’s Petroleo Brasileiro SA (Petrobras) announced that wholly owned subsidiary Petrobras Global Finance BV has announced the purchase prices relating to its tender offers for cash for any and all of its outstanding dollar-denominated notes from 12 series. Petrobras is offering to pay up to an aggregate of $3.5 billion to purchase the notes.

Petrobras Global Finance is offering to purchase notes from the following series, listed in order of acceptance priority level, with the considerations listed per $1,000 principal amount:

• $548.48 million outstanding 5 5/8% global notes due May 2043 (Cusip: 71647NAA7) for $1,042.76, determined using the 1.625% U.S. Treasury due Nov. 15, 2050 and a fixed spread of 296 basis points;

• $3,930,399,000 outstanding 5.093% global notes due January 2030 (Cusips: 71647NBE8, 71647NBF5, N6945AAL1) for $1,045.34, determined using the 1.125% U.S. Treasury due Feb. 15, 2031 and a fixed spread of 281 bps;

• $1,726,250,000 outstanding 6¾% global notes due June 2050 (Cusip: 71647NBG3) for $1,075.43, determined using the 1.625% U.S. Treasury due Nov. 15, 2050 and a fixed spread of 385 bps;

• $2,047,937,000 outstanding 6.9% global notes due March 2049 (Cusip: 71647NBD0) for $1,104.60, determined using the 1.625% U.S. Treasury due Nov. 15, 2050 and a fixed spread of 378 bps;

• $1,000,400,000 outstanding 5¾% global notes due February 2029 (Cusip: 71647NAZ2) for $1,102.08, determined using the 1.125% U.S. Treasury due Feb. 15, 2031 and a fixed spread of 255 bps;

• $2,040,578,000 outstanding 5.999% global notes due January 2028 (Cusips: 71647NAW9, N6945AAK3, 71647NAY5) for $1,107.70, determined using the 1.125% U.S. Treasury due Feb. 15, 2031 and a fixed spread of 251 bps;

• $1,109,754,000 outstanding 5.299% global notes due January 2025 (Cusips: 71647NAT6, 71647NAV1, N6945AAJ6) for $1,105.35, determined using the 0.75% U.S. Treasury due March 31, 2026 and a fixed spread of 152 bps;

• $795,071,000 outstanding 6¼% global notes due March 2024 (Cusip: 71647NAM1) for $1,111.54, determined using the 0.250% U.S. Treasury due March 15, 2024 and a fixed spread of 197 bps;

• $1,058,788,000 outstanding 6¾% global notes due January 2041 (Cusip: 71645WAS0) for $1,124.30, determined using the 1.625% U.S. Treasury due Nov. 15, 2050 and a fixed spread of 336 bps;

• $1,028,905,000 outstanding 6 7/8% global notes due January 2040 (Cusip: 71645WAQ4) for $1,135.00, determined using the 1.625% U.S. Treasury due Nov. 15, 2050 and a fixed spread of 336 bps;

• $1,647,605,000 outstanding 7¼% global notes due March 2044 (Cusip: 71647NAK5) for $1,154.01, determined using the 1.625% U.S. Treasury due Nov. 15, 2050 and a fixed spread of 367 bps; and

• $1,832,653,000 outstanding 7 3/8% global notes due January 2027 (Cusip: 71647NAS8) for $1,195.07, determined using the 0.75% U.S. Treasury due March 31, 2026 and a fixed spread of 274 bps.

Pricing was determined at 11 a.m. ET on April 7.

In addition to the consideration, holders will receive accrued interest to but excluding the settlement date.

The offers were announced on March 30 and will expire at 5 p.m. ET on April 7 and are expected to settle on April 12.

Notes tendered may be withdrawn at any time prior to 5 p.m. ET on April 7.

Tenders under guaranteed delivery procedures are due by 5 p.m. ET on April 9.

The offers are not contingent on the tender of any minimum principal amount of notes, and each offer is independent of and not conditioned on completion of the other offers.

However, each offer is conditioned on the aggregate consideration for all the offers, excluding accrued interest, not exceeding $3.5 billion and on the maximum consideration being sufficient to pay the consideration for all notes of the respective series, after paying for all notes having a higher acceptance priority level.

If the maximum consideration condition is not satisfied with respect to each series of notes for (i) a series of notes (the “first non-covered notes”) for which the maximum consideration is less than the sum of (a) the aggregate consideration for all tendered first non-covered notes and (b) the aggregate consideration for all tendered notes of all series having a higher acceptance priority level than the first non-covered notes, and (ii) all series of notes with an acceptance priority level lower than the first non-covered notes (together with the first non-covered notes, the “non-covered notes”), then PGF may, at any time at or prior to the expiration date:

• Terminate an offer with respect to one or more series of non-covered notes for which the maximum consideration condition has not been satisfied and promptly return all tendered notes of that series, and of any series of non-covered notes to the respective tendering holders; or

• Waive the maximum consideration condition with respect to one or more series of non-covered notes and accept all notes of that series, and of any series of notes having a higher acceptance priority level, tendered; or

• If there is any series of non-covered notes for which (i) the aggregate consideration necessary to purchase all tendered notes of that series, plus (ii) the aggregate consideration necessary to purchase all tendered notes of all series having a higher acceptance priority level than that series, other than any non-covered notes, are equal to, or less than, the maximum consideration, accept all tendered notes of all series having a lower acceptance priority level, until there is no series of notes with a higher or lower acceptance priority level to be considered for purchase for which the offer conditions are met.

The issuer noted that it is possible that a series of notes with a particular acceptance priority level will fail to meet the conditions and therefore will not be accepted for purchase even if one or more series with a higher or lower acceptance priority level is accepted for purchase. If any series of notes is accepted for purchase, all notes of that series that are tendered will be accepted for purchase.

BNP Paribas Securities Corp. (212 841-3059 or 888 210-4358), Banco Bradesco BBI SA (646 432-6643), Citigroup Global Markets Inc. (800 558-3745 or 212 723-6106), Credit Agricole Securities (USA) Inc. (866 807-6030 or 212 261-7802), Mizuho Securities USA LLC (212 205-7736 or 866 271-7403) and Morgan Stanley & Co. LLC (800 624-1808 or 212 761-1057) are dealer managers for the offers.

Global Bondholder Services Corp. (866 470-3800 or 212 430-3774, http://www.gbsc-usa.com/Petrobras/) is the depositary and information agent.

The energy company is based in Rio de Janeiro.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.