Petrobras tenders for any and all of five notes series

By Jennifer Chiou

New York, July 18 - Petroleo Brasileiro SA-Petrobras announced its subsidiary Petrobras International Finance Co.-Pifco began a cash tender offer for any and all of five series of its notes, which have a combined outstanding amount in excess of $1 billion.

The notes include the company's 12 3/8% global step-up notes due April 1, 2008, 9 7/8% senior notes due May 9, 2008, 9¾% senior notes due July 6, 2011, 9 1/8% global notes due July 2, 2013 and 8 3/8% global notes due Dec. 10, 2018.

The company will pay an amount based on the present value of the notes on their earliest call date, discounted using the yield to maturity of the 4.625% Treasury due March 31, 2008 and 35 basis points for the 12 3/8% notes, the 2.625% Treasury due May 15, 2008 and 35 bps for the 9 7/8% notes, the 5.125% Treasury due June 30, 2011 and 70 bps for the 9¾% notes, the 4.25% Treasury due Aug. 15, 2013 and 125 bps for the 9 1/8% notes, and the 5.125% Treasury due May 15, 2016 and 190 bps for the 8 3/8% notes.

Petrobras said it will also pay accrued interest to the settlement date.

The offers expire at 5 p.m. ET on July 24.

The Bank of New York is the depositary and D.F. King & Co., Inc. is the information agent (call collect 212 269-5550 or 800 859-8508). Morgan Stanley & Co., Inc. (800 624-1800 or call collect 212 761-1864) and UBS Securities LLC at (888 722-9555, ext. 4210 or call collect 203 719-4210) are the dealer managers.

The Rio de Janeiro-based oil producer said the tenders are part of its plan to reduce overall indebtedness and take advantage of strong cash flow generation.

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