By Angela McDaniels
Seattle, Feb. 5 - Petroleo Brasileiro SA (Petrobras) and its subsidiary Petrobras International Finance Co. received tenders for $399.1 million principal amount of notes in five series during an exchange offer that ended on Friday, according to a company news release.
Petrobras said it would buy back up to $500 million of old notes and, accordingly, accepted for purchase all $399.1 million of the tendered notes.
Specifically, Petrobras accepted tenders for $7.8 million of its 12 3/8% global step-up notes due April 1, 2008; for $14 million of its 9 7/8% senior notes due May 9, 2008; for $51 million of its 9¾% senior notes due July 6, 2011; for $124.1 million of its 9 1/8% global notes due July 2, 2013; and for $202.1 million of its 7¾% global notes due Sept. 15, 2014.
On Wednesday, the expected settlement date, Petrobras International Finance will issue to tendering noteholders $399.1 million principal amount of new 6 1/8% notes due Oct. 6, 2016, which priced at $997.30 on Jan. 2 based on a fixed spread of 140 basis points over the 4 5/8% U.S. Treasury security due Nov. 15, 2016.
The new notes will form a single series with the $500 million of 6 1/8% notes due Oct. 6, 2016 the company priced at $995.57 in September via Morgan Stanley and UBS. Following the exchange, there will be $899.1 million principal amount of the 6 1/8% notes due 2016 outstanding.
For each $1,000 principal amount of old notes, noteholders who exchanged will receive $1,000 principal amount of the new 6 1/8% notes plus a cash payment, which is noted in the table below. In total, noteholders will receive an amount equal to the total exchange price, minus the reopen issue price of the reopening notes, plus accrued interest up to the settlement date for the old notes, minus accrued interest to the settlement date for the reopening notes.
The total consideration includes a $20 premium for noteholders who tendered by Jan. 19, the early tender deadline. The exchange offer began on Jan. 4.
Bank of New York NA (212 815-5788) was the exchange agent, D.F. King & Co. (212 269-5550) was the information agent for the exchange offer and Morgan Stanley and UBS Investment Bank were the dealer managers for the reopened 6 1/8% notes.
Petrobras is a state-run oil company based in Brazil.
Exchange prices
| Security | Amount tendered | Amount outstanding | Cash payment | Interest | Total exchange price
|
| 12 | 3/8% notes due 2008 | $7.8 million | $126.8 million | $104.98 | $43.31 | $1,079.56
|
| 9 | 7/8% notes due 2008 | $14 million | $224.3 million | $63.60 | $24.14 | $1,057.41
|
| 9¾% notes due 2011 | $51 million | $235.4 million | $171.37 | $8.40 | $1,180.86
|
| 9 | 1/8% notes due 2013 | $124.1 million | $374.2 million | $172.42 | $8.87 | $1,181.44
|
| 7¾% notes due 2014 | $202.1 million | $397.2 million | $120.46 | $30.57 | $1,107.78
|
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