Ipiranga extends tender offer for 7 7/8% notes to May 2

By Angela McDaniels

Seattle, March 28 - Companhia Brasileira de Petroleo Ipiranga said it has extended the tender offer for its 7 7/8% step-up notes due Aug. 1, 2008 to 9 a.m. ET on May 2 from 5 p.m. ET on April 11, unless terminated or further extended.

Payment in the tender will be set using a spread of 75 basis points over the 2 5/8% U.S. Treasury note due May 15, 2008 at 2 p.m. ET on April 18. Ipiranga will also pay accrued interest up to but excluding the settlement date.

As of 5 p.m. ET on March 28 - the consent payment deadline - 58.2% of the notes, or $75.1 million, had been tendered and related consents delivered.

The company announced on March 23 that it had received the consents needed to amend the indenture governing the notes. It subsequently entered into a supplemental fiscal agency agreement for the amendments that, among other things, will eliminate substantially all of the restrictive covenants and certain events of default.

The amendment will become operative once the company pays the tender consideration to noteholders. Ipiranga will use R$300 million of proceeds from a R$450 million offering of debentures to fund the tender consideration.

Banc of America Securities LLC is the dealer manager (888 292-0070 or call collect 704 388-9217). The information agent is D.F. King & Co., Inc. (800 859-8511 or call collect 212 269-5550).

The Rio de Janeiro, Brazil-based company refines and distributes petroleum products.

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