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Ipiranga sets pricing in tender offer for 7 7/8% notes
By Jennifer Chiou
New York, April 18 - Companhia Brasileira de Petroleo Ipiranga announced pricing in its tender offer for its $133.715 million of 7 7/8% step-up notes due Aug. 1, 2008.
For each $1,000 principal amount of notes, the company said it will pay $1,088.04, which includes a $30.00 consent payment for those who tendered their securities by 5 p.m. ET on March 28, the consent deadline.
Payment in the tender was based on 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. The reference yield was 4.886% and the tender yield was 5.636%.
Ipiranga will also pay accrued interest up to but excluding the settlement date.
As of April 18, holders of $75.075 million or 56.2% of the notes had tendered their securities.
As of the consent deadline, $75.1 million or 58.2% of the notes had been tendered.
The offer ends at 9 a.m. ET on May 2, extended from 5 p.m. ET on April 11.
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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