PDVSA Underscores Pricing of Tender Offer for Petrozuata Project Bonds

PDVSA has announced the pricing of its previously announced cash tender offer and consent solicitation for any and all of the outstanding 7.63% Series A Bonds due 2009, 8.22% Series B Bonds due 2017 and 8.37% Series C Bonds due 2022 2022 issued by Petrozuata Finance Inc. in connection with the Petrozuata extra-heavy crude oil project in the Orinoco Belt region.

The tender offer and consent solicitation are being made pursuant to an Offer to Purchase and Consent Solicitation Statement, dated August 14, 2008 and related Consent and Letter of Transmittal.

The applicable purchase price for each $1,000 principal amount of each Series of Bonds validly tendered on or prior to midnight, New York City time, on September 12, 2008, the expiration date, and accepted for purchase by PDVSA will be $1,039.14 per $1,000 principal amount of the 2009 Bonds, $1,113.12 per $1,000 principal amount of the 2017 Bonds, and $1,165.63 per $1,000 principal amount of the 2022 Bonds.

In addition to the Offer Consideration, the holders of validly tendered and accepted Bonds will receive a consent fee in an amount equal to 0.25% of the principal amount of Bonds tendered. Therefore, the total consideration for each Series of Bonds validly tendered, consisting of the Offer Consideration and the consent fee, will be $1,041.64 per $1,000 principal amount of the 2009 Bonds, $1,115.62 per $1,000 principal amount of the 2017 Bonds, and $1,168.13 per $1,000 principal amount of the 2022 Bonds.

The payment date for validly tendered and accepted Bonds is currently expected to be Monday, September 15, 2008. As provided in the Offer to Purchase, the Offer Consideration was determined as of 2:00 p.m., New York City time, September 11, 2008, by reference to (i) for the 2009 Bonds, a fixed spread of 30 basis points over the yields, interpolated on a straight-line basis, of the U.S. Treasury 4.625% security due November 30, 2008 and U.S. Treasury 3.375% security due December 15, 2008, (ii) for the 2017 Bonds, a fixed spread of 50 basis points over the yields, interpolated on a straight-line basis, of the U.S. Treasury 4.250% security due November 15, 2013 and U.S. Treasury 4.000% security due February 15, 2014, and (iii) for the 2022 Bonds, a fixed spread of 50 basis points over the yields, interpolated on a straight-line basis, of the U.S. Treasury 7.250% security due August 15, 2022 and U.S. Treasury 7.625% security due November 15, 2022. The yield to maturity of the respective primary issue as of the price determination date was determined to be 1.54% for the 2009 Bonds, 2.90% for the 2017 Bonds and 4.10% for the 2022 Bonds.

As of 5:00 p.m., New York City time, on September 11, 2008, PDVSA had received valid tenders and consents from holders of approximately $693.9 million in aggregate principal amount of the Bonds, representing approximately 91.9% of the outstanding Bonds.

Lazard Freres & Co. LLC is the Dealer Manager and Solicitation Agent for the tender offer and consent solicitation and may be contacted at (312) 407-6674 (call collect). Requests for documents may be directed to Global Bondholder Services Corporation, the Information Agent, at (212) 430-3774 (call collect) or (866) 470-3700 (toll free).
 

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