Ipiranga to sell R$450 million of debentures, tender for 7 7/8% notes

New York, March 9 - Companhia Brasileira de Petróleo Ipiranga said it plans an offering of R$450 million of debentures, with R$300 million of the proceeds to fund a tender for its 7 7/8% notes due Aug. 1, 2008.

The new debentures, approved at a shareholders meeting on Feb. 22, will have a five-year maturity, amortizing in years three, four and five.

In addition to the R$300 million of proceeds that will be used for the tender, R$150 million of proceeds will be used to reinforce Ipiranga's capital strength.

Payment in the tender for the existing bonds will be set using a spread of 75 basis points over the 2 5/8% U.S. Treasury note due May 15, 2008. Ipiranga will also pay accrued interest up to but excluding the settlement date.

The tender runs through April 11.

Ipiranga, a Rio de Janeiro, Brazil-based refiner and distributor of petroleum products, issued $135 million of the existing bonds on July 31, 2003.

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