Brazil’s USJ issues $197.03 million 9 7/8%/12% PIK notes in exchange

By Susanna Moon

Chicago, May 17 – Brazil’s USJ – Acucar e Alcool SA said investors had tendered and given consents for $245,896,000 principal amount, or 89.42%, of its 9 7/8% senior notes due 2019 in the private exchange offer that ended at 5 p.m. ET on May 16.

The company was offering newly issued 9 7/8%/12% senior secured pay-in-kind toggle notes due 2021 in exchange for its 9 7/8% notes.

In the exchange, USJ will issue $197,032,000 of the PIK notes, with settlement on May 17, according to a company notice.

The exchange had been extended from 11:59 p.m. ET on May 13. Before that, the exchange was extended from May 6, May 2 and April 18.

As of 5 p.m. ET on May 13, holders had tendered and delivered consents for $245,696,000 principal amount, or 89.34%, of the notes for exchange.

On May 16, the company said it intended to waive the 90% minimum participation condition and that it had already set aside the condition that holders deliver documentation consenting to an extrajudicial restructuring plan.

Also, the company said it entered into a supplemental indenture to the notes on May 13 for the proposed amendments and, as a result, tendered notes may no longer be withdrawn and consents no longer be revoked.

USJ said on May 3 that it had again amended the exchange offer as a result of a request by holders who “own a substantial portion” of the notes.

As a result, if holders tender between 60% and 90% of the notes, and the company receives corporate approvals and bankruptcy court authorization of the plan, then holders would receive $750 principal amount of new notes per $1,000 principal amount. In this case, holders would receive the new notes after the plan is granted by the bankruptcy courts. Originally, they would have received $700 of new notes per $1,000 par amount.

If holders tender for exchange more than 90% of the notes and the offer is completed, they will receive $750 principal amount of newly issued 9 7/8%/12% senior secured PIK notes due 2021 for each $1,000 principal amount. That amount was unchanged.

The company also will pay accrued interest up to but excluding the settlement date.

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