Petrobras Announces Debt Exchange Offers
Petroleo Brasileiro S.A. said that its wholly owned subsidiary Petrobras International Finance Company (PIFCo) has commenced exchange offers of the five series of notes listed in the table below (Old Notes) for new notes (Reopening Notes) and a cash amount. The Reopening Notes constitute a further issuance of, and form a single fungible series with PIFCo's benchmark 6.125% global notes due 2016 that were issued on October 6, 2006.
Information pertaining to the exchange offers:
We are offering holders of Old Notes an opportunity to exchange Old Notes for a combination of Reopening Notes and a U.S. Dollar amount in cash (Cash Payment). For each U.S.$1,000 principal amount of Old Notes validly tendered and not withdrawn prior to the Early Tender Date of January 18, 2007, unless extended by Petrobras and PIFCo, subject to prorationing, holders will receive a combination of U.S. $1,000 principal amount of our Reopening Notes and a Cash Payment (Total Exchange Price) calculated using a fixed-spread pricing formula as set forth in the applicable prospectus. We have designated U.S.$20 of the Total Exchange Price as the Early Tender Payment, which will be paid only to holders who validly tender their Old Notes on or prior to the applicable Early Tender Date and do not validly withdraw their tenders.
Outstanding Priority PIFCo Principal Order Notes CUSIP/ISIN No. Amount 1 12.375% Global 71645WAF8 / U.S.$134,622,000 Step-Up Notes US71645WAF86 due 2008 ("Step-Up Notes") 2 9.875% Senior G7028BAA9 / U.S.$238,246,000 Notes due 2008 USG7028BAA91*; ("2008 Notes") 71646FAA5 / US71646FAA57; 71646FAB3 / US71646FAB31* 3 9.75% Senior 71645WAB7 / U.S.$286,356,000 Notes due 2011 US71645WAB72*; ("2011 Notes") G7028BAB7 / USG7028BAB74*; 71645WAA9 / US71645WAA99 4 9.125% Global 71645WAG6 / U.S.$498,335,000 Notes due 2013 US71645WAG69 ("2013 Notes") 5 7.750% Global 71645WAJ0 / U.S.$600,000,000 Notes due 2014 US71645WAJ09 ("2014 Notes") The following table should be used in connection with the calculation of the Reopen Issue Price of the Reopening Notes and the yield to maturity of the Original 2016 Notes for the Qualified Reopening Condition, as set forth in this prospectus: 6.125% Global 71645WAL5 / U.S.$500,000,000 Notes due 2016 US71645WAL54 ("Original 2016 Notes") Reference Priority Maturity Bloomberg Treasury Fixed Spread Order Date Page Security (in basis points) 1 April 1, 2008 BBT 4 4.625% due 10 3/31/08 2 May 9, 2008 BBT 4 2.625% due 10 5/15/08 3 July 6, 2011 BBT 5 5.125% due 35 6/30/11 4 July 2, 2013 BBT 6 4.250% due 95 8/15/13 5 September 15, 2014 BBT 6 4.250% due 120 8/15/14 The following table should be used in connection with the calculation of the Reopen Issue Price of the Reopening Notes and the yield to maturity of the Original 2016 Notes for the Qualified Reopening Condition, as set forth in this prospectus: October 6, 2016 BBT 6 4.625% due 140 11/15/16 * These Notes are admitted to trading on the regulated market of the Luxembourg Stock Exchange.
The Cash Payment will be determined at 2:00 p.m. New York time on the first business day after the Early Tender Date of each Offer, using the fixed- spread pricing formula to determine the value of the Old Notes and the Reopening Notes.
The amount of the Cash Payment for each U.S.$1,000 principal amount of Old Notes will equal (i) the applicable Total Exchange Price, minus (ii) the Reopen Issue Price of the Reopening Notes, plus (iii) the accrued and unpaid interest with respect to the relevant series of Old Notes to, but not including, the Settlement Date, minus (iv) the accrued and unpaid interest with respect to the Reopening Notes to, but not including, the Settlement Date.
Our obligation to accept Old Notes tendered in the Offers is conditioned on the satisfaction of certain conditions described in the applicable prospectus, including the condition that we will issue a maximum principal amount of U.S.$500,000,000 of Reopening Notes issuable under all of the Offers. In the event that this condition is not satisfied, we will accept the series of Old Notes in the priority order set forth in the chart above and we will prorate the lowest priority series in order to cause the condition to be satisfied. Old Notes with an acceptance priority level following the prorated series of Old Notes will not be accepted for exchange.
Old Notes tendered before the applicable Early Tender Date may be withdrawn at any time on or prior to 5:00 p.m., New York City time, on the applicable Early Tender Date but not thereafter. Old Notes tendered after the applicable Early Tender Date may not be withdrawn, except as described in the applicable prospectus.
The reference yield for the applicable reference treasury security will be calculated by Morgan Stanley & Co., Incorporated and UBS Securities LLC in accordance with standard market practice as of 2:00 pm New York City time, on January 19, 2007, unless extended by Petrobras and PIFCo, as reported on the applicable Bloomberg Government Pricing Monitor page indicated in the chart above, or, if any relevant price is not available on a timely basis on the applicable Bloomberg Page or is manifestly erroneous, such other recognized quotation source as the dealer managers shall select in their sole discretion.
The offers are scheduled to expire at 5:00 pm, New York City time, on February 1, 2007, unless extended or earlier terminated. Settlement of each offer is expected to occur three business days after the applicable expiration time of that offer.
PIFCo has retained Morgan Stanley & Co., Incorporated and UBS Securities LLC to act as dealer managers for the offers, The Bank of New York to act as exchange agent for the offers, The Bank of New York (Luxembourg) S.A. to serve as Luxembourg agent for the offers and D.F. King & Co., Inc. to act as information agent for the offers.
Requests for documents (including the prospectus) may be directed to D.F. King & Co., Inc. by telephone at (212) 269-5550 for banks and brokers or at (800) 859-8508 for all others, or in writing at 48 Wall Street, 22nd Floor, New York, New York 10005. These documents contain important information, and holders should read them carefully before making any investment decision.
Questions regarding the offers may be directed to Morgan Stanley & Co., Incorporated at (800) 624-1800 (in the United States) or (212) 761-1864 (outside the United States) and UBS Securities LLC at (888) 722-9555, ext. 4210 (in the United States) or (203) 719-4210 (outside the United States).
This announcement does not constitute an offer to purchase or a solicitation of an offer to sell securities. The offers are being made solely by the offer to purchase and related letter of transmittal. The offers shall not be made in any such jurisdiction in which it is not permitted to be made under applicable law.
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