Swiss Insured Brazil Power redemption solicitation successful for 9.85% notes

By Mary-Katherine Stinson

Lexington, Ky., Sept. 21 – Swiss Insured Brazil Power Finance Sarl reported the success of its consent solicitation for its 9.85% senior secured notes due 2032 (ISINs: L8915MAA3, 870880AA9), according to a press release.

The company has received the requisite consents, including from holders owning at least the 56.25% aggregate outstanding principal amount of notes and from uninsured lenders owning at least 56.25% aggregate outstanding principal amount of debt under the uninsured loan agreement as required under the company intercreditor agreement.

The issuer planned to hold noteholder meetings to amend the debenture to include a new put option so that guarantor Celse – Centrais Eletricas de Sergipe SA may repurchase all of the debentures, a put option that would be triggered by Celse’s issuing a prepayment notice to senior lenders. Additionally, the company wanted a waiver in the indenture to allow Celse to incur debt to fund the purchases, repayments and redemptions described in the consent solicitation statement.

The company expects to receive all consents required under the debenture indenture, the company intercreditor agreement and the project intercreditor agreement necessary to enact the CELSE proposed amendments and agreements. They are expected to become effective on Sept. 21, on which date the company intends to enter a supplemental indenture giving effect to the amendments. They will become operative for each series of notes only upon payment of the consent effectiveness payment.

The senior lenders referred to are Inter-American Investment Corp. and the International Finance Corp.

As previously reported there are currently R$2,669,810,887.50 of the notes outstanding.

The repurchase price will be the lesser of par or the sum of the remaining principal and interest payments discounted on a semiannual basis at the BRL National Treasury Note due Jan. 1, 2029 less accrued and unpaid interest to the repurchase date.

The solicitation expired at 5 p.m. ET on Sept. 20, also the final revocation time.

The company is willing to pay two consent payments, in both cases multiplied by an 83.3925% scaling factor and based on R$1,000 debentures.

The first R$5.00 (before scaling) consent effectiveness payment will be made on the initial settlement date of Sept. 25. The second R$25.00 (also to be scaled) additional consent consideration will be paid at the earlier of 20 business days following the expiration time or the business day before the notes are scheduled to be redeemed.

The consent considerations are denominated in reais but will be settled in dollars, with the conversion rate based on the selling rate for reais into dollars reported by the Brazilian Central Bank on the “PTAX VENDA800” screen at 4 p.m. ET on Sept. 21.

The scaling factor reflects the fact that the notes are subject to principal amortization.

Citigroup Global Markets Inc. is the sole structuring and lead solicitation agent (212 723-6106, 800 558-3745, ny.liabilitymanagement@citi.com).

Banco Bradesco BBI SA (+55 11 3847 5610), Banco BTG Pactual SA – Cayman Branch (212 293-4600, ol-dcm@btgpactual.com), Itaú BBA USA Securities, Inc. (212 824-5083) and Santander US Capital Markets LLC (855 404-3636) are co-solicitation agents

D.F. King & Co., Inc. is the information agent (800 290-6427, 212 269-5550, celse@dfking.com).

Swiss Insured Brazil Power is a Luxemburg special purpose vehicle issuing debt for Celse, a Brazilian company engaging in power generation from natural gas thermal plants.

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