By Mary-Katherine Stinson
Lexington, Ky., March 8 – FS Luxembourg Sarl sold $500 million of 8 7/8% senior notes due 2031 at 98.727, according to an offering memorandum and a listing notice.
The notes are initially guaranteed by parent FS Industria de Biocombustiveis Ltda. and FS I Industria de Etanol SA.
The notes feature a make-whole call before Feb. 12, 2027 at adjusted Treasuries plus 50 basis points. On or after that date, the notes are callable for any 12-month period beginning Feb. 12 of each respective year as follows: in 2027 at 104.438, in 2028 at 102.291, in 2029 at 101.109; and at par beginning in 2030.
There is a change of control put at 101, as well as an optional tax redemption at par should there be a change in any tax laws.
The notes are subject to a conditional clean-up call, exercisable if a minimum of 85% of the notes are repurchased in connection with a tender offer.
Morgan Stanley & Co. LLC is the lead left global coordinator. Citigroup Global Markets Inc. and Santander US Capital Markets LLC are also global coordinators.
Banco BTG Pactual SA—Cayman Branch, J.P. Morgan Securities LLC, UBS Securities LLC and XP Inc. are the bookrunners.
Proceeds are earmarked to finance or refinance eligible green projects, including to fund a concurrent tender offer and consent solicitation which expired Feb. 23, and to pay capital and operational expenditures related to the production of corn ethanol. The amounts allocated to the projects will include capital expenditures disbursed up to 12 months before or after the notes’ issuance, and operational expenditures incurred after the notes’ issuance.
The concurrent cash tender offer and consent solicitation pertained to any and all the company’s 10% senior notes due 2025.
The notes will be listed on the Singapore Exchange effective March 8.
The ethanol producer is based in Sao Paulo, Brazil.
| Issuer: | FS Luxembourg Sarl
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| Guarantor: | FS Industria de Biocombustiveis Ltda. and FS I Industria de Etanol SA
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| Amount: | $500 million
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| Issue: | Senior notes
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| Maturity: | Feb. 12, 2031
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| Bookrunners: | Morgan Stanley & Co. LLC (lead left), Citigroup Global Markets Inc., Santander US Capital Markets LLC, Banco BTG Pactual SA—Cayman Branch, J.P. Morgan Securities LLC, UBS Securities LLC and XP Investimentos Corretora de Cambio, Titulos e Valores Mobiliarios SA
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| Co-managers: | BCP Securities, Inc.
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| Trustee: | Bank of New York Mellon
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| Counsel to issuer: | Milbank LLP (US law), Mattos Filho, Veiga Filho, Marrey Jr. e Quiroga Advogados (Brazilian law) and Arendt & Medernach (Luxembourg law)
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| Counsel to underwriters: | Simpson Thacher & Bartlett LLP (US law) and Machado, Meyer, Sendacz & Opice Advogados (Brazilian law)
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| Coupon: | 8 7/8%
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| Price: | 98.727 plus accrued interest from, and including, Feb. 12, 2024
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| Call features: | At adjusted Treasuries plus 50 bps until Feb. 12, 2027; from Feb. 12, 2027 at 104.438; from Feb. 12, 2028 at 102.291; from Feb. 12, 2029 at 101.109; from Feb. 12, 2030 at par; clean-up call if a minimum of 85% of outstanding notes are purchased in connection with a tender offer
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| Change of control: | At 101
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| Equity clawback: | Up to 35% at 108.875 before Feb. 12, 2027
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| Trade date: | Jan. 30
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| Settlement date: | Feb. 12
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| Listing date: | March 8
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| Distribution: | Rule 144A and Regulation S
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| Cusip: | 30315XAC8, L40756AE5
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