Federative Republic of Brazil Launches Offer To Purchase

Oct 23, 2013, 06:50 ET from Federative Republic of Brazil

BRASILIA, Brazil, Oct. 23, 2013 /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 determined by Brazil in its sole discretion (the "Maximum Purchase Amount"), subject to the terms and conditions contained in the Offer to Purchase, dated October 23, 2013 (the "Offer to Purchase"). Brazil will announce the Maximum Purchase Price at or around 7:30 a.m., New York City time on Thursday, October 24, 2013. The Offer is conditioned on the pricing of a new issue of Brazil's Global Bonds due 2025, yet to be priced (the "New Bonds") in an amount and on terms and conditions acceptable to Brazil.

The price paid per U.S.$1,000 principal amount for each series of Bonds tendered and accepted pursuant to the Offer (the "Purchase Price") during the Tender Period (as defined below) will be calculated, in accordance with standard market practice, based on the fixed spreads listed in the table below (the "Fixed Spreads"), and will be the price per U.S.$1,000 principal amount of each such series of Old Notes, that results in a yield to maturity calculated as the applicable U.S. Treasury Rate plus the Fixed Spreads shown in the table below.  Holders will also receive an amount in cash equal to any accrued and unpaid interest on their Bonds up to (but excluding) the Settlement Date (as defined in the Offer to Purchase). Payment will be made on the Settlement Date in U.S. Dollars.

Bonds (1)


Outstanding Aggregate Principal Amount as of October 22, 2013 (2)(3)

Reference U.S. Treasury Security (4)

Bloomberg Screen

Fixed Spread (Basis Points)

Hypothetical Purchase Price (5)

6.000% Global Bonds due 2017



0.875% due 01/31/2017




5.875% Global Bonds due 2019



1.25% due 01/31/2019




8.875% Global Bonds due 2019



1.25% due 10/31/2019




12.750% Global Bonds due 2020



1.375% due 01/31/2020




8.875% Global Bonds due 2024



2.50% due 08/15/2023




8.875% Global Bonds due 2024



2.50% due 08/15/2023




8.750% Global Bonds due 2025



2.50% due 08/15/2023




10.125% Global Bonds due 2027


U.S.$1,650,163,000 (4 )

2.50% due 08/15/2023




12.250% Global Bonds due 2030



2.50% due 08/15/2023




1 Each series of Bonds is admitted to trading on the Euro MTF market of the Luxembourg Stock Exchange.

2 These amounts include Bonds that may be held by institutions and companies controlled by the Brazilian Federal Government that have not been cancelled.

3 On October 21, 2013, Brazil acquired U.S.$869,214,000 of its 10.125% Global Bonds due 2027 in a private transaction, which transaction is scheduled to settle on October 24, 2013. The outstanding aggregate principal amount for the 10.125% Global Bonds due 2027 included above is presented net of that transaction.

4 The Dealer Managers will calculate the U.S. Treasury Rate using the bid-side price of the Reference Treasury Security on the applicable Bloomberg Page (as set forth in the adjacent column) at or around the pricing of the New Bond. In the case of the 8.875% Global Bonds due 2024, 8.875% Global Bonds due 2024, 8.750% Global Bonds due 2025, 10.125% Global Bonds due 2027 and 12.250% Global Bonds due 2030, the Dealer Managers will use the actual U.S. Treasury Rate used to calculate the yield for the New Bond.

5 Per U.S.$1,000 principal amount of the Bonds tendered and accepted for purchase. On the Settlement Date, holders will also receive accrued and unpaid interest on the Bonds tendered and accepted for purchase.

The Offer will commence at 6:30 a.m., New York City time, on Wednesday, October 23, 2013 and, unless extended or earlier terminated, expire at 4:00 p.m., New York City time on that same day. Holders in Asia exclusively may submit Tender Orders (as defined in the Offer to Purchase) until 11:59 p.m., New York City time on Wednesday, October 23, 2013. The settlement of the Tender Offer is scheduled to occur on Tuesday, October 29, 2013 (the "Settlement Date").

During the Tender Period, you may place Tender Orders through any Dealer Manager. 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 3:00 p.m, New York City time, on the 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 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.

Deutsche Bank Securities Inc., as Billing and Delivering Bank for the Offer (in such capacity, the "Billing and Delivering Bank") will accept valid tenders of Bonds for purchase on behalf of Brazil, subject to proration as described in the Offer to Purchase. Priority will be given to Tender Orders submitted by holders who place firm orders for New Bonds before the time the Joint Lead Managers stop taking indications of interest for the New Bonds. Such priority will apply, for each tendering holder, with respect to an amount of Tender Orders having a tender value equal to the amount of New Bonds ordered by such holder. 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, the Billing and Delivering Bank, 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 Deutsche Bank Securities Inc. and HSBC (Securities) USA Inc. to act as Dealer Managers for the Offer. Questions regarding the Offer may be directed to the Dealer Managers using the following information:

Deutsche Bank Securities
Attention:  Liability Management Group

In the United States, call toll free: +1-855-287-1922

Outside the United States, call collect: +1-212-250-7527

In Asia: +65 6423 5934

e-mail: US_Liability_Strategies_Team@list.db.com

HSBC Securities (USA) Inc.
Attention:  Global Liability Management Group

In the United States, call toll free: +1-888-HSBC-4LM
Outside the United States, call collect: +1-212-525-5552

In Asia: +852 2822 4100

e-mail: liability.management@hsbcib.com

Requests for the Offer to Purchase should be directed to the Information Agent, Bondholder Communications Group, at (212) 809-2663 or +1 (888) 385-2663 (U.S. toll-free). Materials may also be obtained at http://www.bondcom.com/frb.

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: Neither the communication of this announcement nor any other offer materials relating to the Offer has been approved by an authorized person for the purposes of Section 21 of the UK Financial Services and Markets Act 2000. This document is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) 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.

SOURCE Federative Republic of Brazil