Federative Republic of Brazil Launches Offer to Purchase

BRASILIA, Brazil, April 17, 2012 /PRNewswire/ -- The Federative Republic of Brazil ("Brazil") announced today that it has commenced an offer (the "Offer") to purchase for cash the bonds listed in the table below (collectively the "Bonds") in an aggregate principal amount that will not result in an aggregate Purchase Price (as defined below) that exceeds 50% of the principal amount of an issue of Brazil's Global BRL Bonds due 2024 (the "New Bonds"), yet to be priced, or such other amount as determined by Brazil in its sole discretion (the "Maximum Purchase Amount"),  subject to the terms and conditions contained in the Offer to Purchase, dated April 17, 2012 (the "Offer to Purchase").  Brazil will announce the Maximum Purchase Amount no later than 6:30 a.m., New York City time on Wednesday, April 18, 2012, provided that the Maximum Purchase Amount shall remain subject to modification by Brazil in its sole discretion after such announcement. The Offer is contingent upon the pricing of the New Bonds in an amount and on terms and conditions acceptable to Brazil.

The price paid per R$1,000 principal amount for each series of Bonds tendered and accepted pursuant to the Offer (the "Purchase Price") during the Initial Tender Period (as defined below) will be as specified in the table below.  Holders will also receive any accrued and unpaid interest on their Bonds up to (but excluding) the Applicable Settlement Date (as defined in the Offer to Purchase). Payment will be made on the Applicable Settlement Date in U.S. Dollars, which amount will be determined using the foreign exchange rate announced in connection with the pricing of the New Bonds.

The tender period will consist of the "Initial Tender Period" and the "Subsequent Tender Period", if applicable.  The Initial Tender Period will commence at 7:00 a.m., New York City time, on Wednesday, April 18, 2012 and end at 4:00 p.m., New York City time, on the same day.  During the Initial Tender Period, holders may place orders to tender Bonds ("Initial Tender Orders") with Goldman, Sachs & Co. or HSBC Securities (USA) Inc., as Dealer Managers for the Offer.  The Bonds subject to valid Initial Tender Orders will be accepted, subject to proration as described in the Offer to Purchase, at 7:30 a.m., New York City time, on Thursday, April 19, 2012, the business day following the Initial Tender Period.  Brazil in its sole discretion may terminate the Offer at any time, including prior to any Subsequent Tender Period.  If the Offer is terminated prior to any Subsequent Tender Period, no Bonds other than Bonds subject to Initial Tender Orders, if any, will be eligible to be accepted in the Offer.

During the Initial Tender Period only, priority will be given to Initial Tender Orders submitted by holders who place firm orders for New Bonds during the offering of New Bonds.  Such priority will apply, for each tendering holder, with respect to an amount of Initial Tender Orders having a Purchase Price equal to the amount of New Bonds ordered by such holder, subject to certain limits.

The Subsequent Tender Period, if applicable, will commence at 9:00 a.m., New York City time, on Thursday, April 19, 2012, and, if not earlier terminated or extended, end at the earlier of (i) the time that tenders in respect of Bonds having an aggregate purchase price equal to the Maximum Purchase Amount have been accepted and (ii) 4:00 p.m. on Friday, April 20, 2012.   During each business day of the Subsequent Tender Period, you may tender your Bonds to either of the Dealer Managers between 9:00 a.m. and 4:00 p.m., New York City Time, unless the Offer is earlier terminated (including if the Maximum Purchase Amount is reached).  Valid tenders made during the Subsequent Tender Period will be accepted on a first-come basis.

The Purchase Price, as determined by Brazil in its sole discretion, payable for each R$1,000 principal amount tendered and accepted pursuant to the Offer for each business day during any Subsequent Tender Period will be announced no later than 7:30 a.m., New York City time, on such date by publication to an internationally recognized news service.  The Purchase Price for Bonds tendered during the Subsequent Tender Period may be lower than, higher than or equal to the Purchase Price payable for Bonds tendered during the Initial Tender Period.

You may tender your Bonds through one of the Dealer Managers only.  You will NOT be able to submit tenders through Euroclear, Clearstream, or the Depository Trust Company ("DTC") systems.  There is no letter of transmittal for the Offer.  If you hold Bonds through DTC, they must be delivered for settlement no later than 2:30 p.m., New York City time, on the Applicable Settlement Date.  If you hold Bonds through Euroclear or Clearstream, the latest process you can use to deliver your Bonds is the overnight process, one day prior to the Applicable Settlement Date; you may not use the optional daylight process.  Failure to deliver Bonds on time may result in the cancellation of your tender and in you becoming liable for any damages resulting from that failure.  Holders will not have withdrawal rights with respect to any tenders of Bonds in the Offer.

The Dealer Managers will accept valid tenders of Bonds for purchase on behalf of Brazil, subject to proration as described in the Offer to Purchase.  Bonds accepted for purchase will be settled on a delivery versus payment basis in accordance with customary brokerage practices for corporate fixed income securities (i.e. a "desk to desk" or "broker to broker" trade).

Brazil is making the Offer only in those jurisdictions where it is legal to do so.

The Offer is subject to Brazil's right, at its sole discretion and subject to applicable law, to terminate, withdraw, or amend the Offer at any time.  Each of Brazil and the Dealer Managers reserves the right, in the sole discretion of each of them, not to accept tenders for any reason.     

Brazil has retained Goldman, Sachs & Co. and HSBC to act as dealer managers for the Offer.  Questions regarding the Offer may be directed to Goldman, Sachs & Co. at +1 (800) 828-3182 (U.S. toll free) or +44 20 7774 4799 (London), and HSBC at +1 (888) 472-2456 (U.S. toll-free) or +44 20 7992 6237(London).

Requests for the Offer to Purchase should be directed to the Information Agent, D.F. King & Co., Inc., at, for banks and brokers, (212) 269-5550 (call collect), and for all others toll-free at   (800) 488-8035. Materials may also be obtained at http://www.dfking.com/brazil.

This communication shall not constitute an offer to sell or the solicitation of an offer to buy any security, nor shall there be any sale of the securities referenced in this communication in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.  Securities may not be offered or sold in the United States absent registration or an exemption from registration, and any public offering of securities to be made in the United States will be made by means of a prospectus.

United Kingdom:  This document is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) to investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") or (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Articles 49(2)(a) to (d) of the Order (all such persons together being referred to as "relevant persons"). Any investment or investment activity to which this document relates is available only to relevant persons and will be engaged in only with relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.

Luxembourg: This document does not constitute an offer to buy or a solicitation of an offer to sell any securities, including the New Bonds, in Luxembourg. New Bonds may not be offered to the public in Luxembourg, except in the following circumstances: at any time

(a) to qualified investors which,

(i) prior to the implementation in Luxembourg of directive 2010/73/EU amending the Prospectus Directive (the "PD Amendment Directive") shall, inter alia, refer to:

(x) legal entities which are authorised or regulated to operate in the financial markets or, if not so authorised or regulated, whose corporate purpose is solely to invest in securities;

(y) at any time to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than €43,000,000 and (3) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts.

(ii) after the implementation in Luxembourg of the PD Amendment Directive shall refer to persons or entities that are described in points (1) to (4) of Section I of Annex II to Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on Markets in Financial Instruments, and those who are treated on request as professional clients in accordance with Annex II to Directive 2004/39/EC, or recognized as eligible counterparties in accordance with Article 24 of Directive 2004/39/EC unless they have requested that they be treated as non-professional clients.

(b) prior to the implementation in Luxembourg of the PD Amendment Directive, to fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) which number shall be increased to 150 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) after the implementation in Luxembourg of the PD Amendment Directive; or

(c) at any time in any other circumstances which do not require the publication by (c) the issuer of a prospectus pursuant to Article 3 of the Prospectus Directive.

For the purposes of this provision, the expression an "offer of New Bonds to the public" in relation to any New Bonds in Luxembourg means the communication in any form and by any means of sufficient information on the terms of the offer and the New Bonds to be offered so as to enable an investor to decide to purchase the New Bonds, as defined in the Law of 10 July 2005 on prospectuses for securities and implementing the Prospectus Directive or any variation thereof or amendment thereto.

SOURCE The Federative Republic of Brazil