Fundo Garantidor de Creditos Announces Interim Results Of Tender Offers And Consent Solicitations

SAO PAULO, Aug. 29, 2012 /PRNewswire/ -- FUNDO GARANTIDOR DE CREDITOS ANNOUNCES INTERIM RESULTS OF TENDER OFFER AND CONSENT SOLICITATION FOR 8.000% NOTES DUE 2012 (ISIN XS0452252835) ("2012 NOTES"), 7.000% NOTES DUE 2013 (ISIN XS0523748639) ("2013 NOTES"), 7.625% NOTES DUE 2014 (ISIN XS0619861031) ("2014 NOTES"), 8.500% NOTES DUE 2015 (CUSIP NO. 05955W AA1/ ISIN US05955WAA18) (CUSIP NO. 05955X AA9/ ISIN US05955XAA90) ("2015 NOTES"), 8.250% NOTES DUE 2016 (CUSIP NO. 05955W AB9 / ISIN US05955WAB90) (CUSIP NO. 05955X AB7 / ISIN US05955XAB73) ("2016 NOTES") AND 8.875% SUBORDINATED NOTES DUE 2020 (CUSIP NO. 059493 AB2 / ISIN US059493AB23) (CUSIP NO. P09133 BF8 / ISIN USP09133BF89) (THE "2020 NOTES"), (COLLECTIVELY, THE "NOTES"), IN EACH CASE ISSUED BY BANCO CRUZEIRO DO SUL S.A. (THE "BANK").

The Fundo Garantidor de Creditos (Credit Guarantee Fund, "FGC"), announced today that in connection with its previously announced offer to purchase for cash any and all of the Notes (the "Tender Offer") it received tender levels meeting its expectations, although the Minimum Acceptance Level (as defined below) had not been reached as of 5:00 p.m., New York City time, on August 28, 2012 (the "Early Tender Date"). However, the FGC believes that a sufficient number of Notes will be tendered by the September 12, 2012 expiration date. Concurrently with the Tender Offer, the FGC solicited the consent of holders (the "Consent Solicitations") (i) of the 2015 Notes and 2016 Notes to pass a proposed extraordinary resolution at a meeting of the holders to be held at 12.00 p.m. (New York time) on September 7, 2012 to add a call provision to those notes and (ii) of the 2020 Notes to amend those notes to delete and modify among other covenants, the "Merger Consolidation and Sale of Assets" covenant (together, the "Proposed Amendments"). A sufficient number of consents have been received to enact the Proposed Amendments.

Background

The FGC's obligation to purchase Notes in the Tender Offer is conditioned on the satisfaction or waiver of certain conditions, including a condition that the FGC may terminate the Tender Offer for all of the Notes if (i) it has not received from the holders of the Notes tenders of at least 90% of the aggregate principal amount of the Notes (the "Minimum Acceptance Level"), (ii) it has not received from the holders of the local debt obligations tenders of at least 90% of the aggregate principal amount of the local debt obligations , (iii) a Potential Acquirer of the Bank has not entered into a binding agreement to purchase the Bank or (iv) an extra-judicial liquidation (liquidacao extrajudicial) of the Bank occurs. A "Potential Acquirer" of the Bank means a financial institution authorized to operate in Brazil that meets the following requirements (i) it has a minimum shareholders' equity compatible with the Tender Offer and above R$2.5 billion; (ii) the provision of guarantees for the minimum capital contribution required, which shall be made in cash; (iii) no credit risk due to funding transactions entered into with the FGC that could compromise its future financial condition; and (iv) no pending issues with the Central Bank of Brazil (the "Central Bank") which could prevent an immediate approval by the Central Bank.

The FGC intends that the holders of the Notes, the FGC and the holders of other obligations of the Bank maturing after September 12, 2012 share in the cost of reducing the Bank's outstanding liabilities in excess of its assets. Accordingly, to the extent the FGC has received, as a result of the transactions contemplated by the Tender Offer, more Notes than it has budgeted for, it may on a pro rata weighted average basis, increase the amount of the tender consideration. Furthermore, to the extent a Potential Acquirer of the Bank enters into a binding agreement to purchase the Bank for more that R$1.00, the FGC may, to the extent practicable and in its sole discretion, reflect a portion of those excess amounts by increasing the amount of the tender consideration on a pro rata weighted average basis.

Information for holders still wishing to tender

The terms and conditions of the Tender Offer and Consent Solicitations are described in the Offer to Purchase and Consent Solicitation Statement, dated August 15, 2012 (the "Offer Document"). Copies of the Offer Document are available to holders of Notes from Bondholder Communications Group, LLC, the information and tender agent for the Tender Offer and Consent Solicitations (the "Information and Tender Agent"). Requests for copies of the Offer Document should be directed to the Information and Tender Agent at +1 212 809 2663, +44 (0)20 7382 4580, [email protected] or www.bondcom.com/bcs.  

The FGC reserves the right, in its sole discretion, not to accept any tenders of Notes or deliveries of consents for any reason. The FGC is making the Tender Offer and Consent Solicitations only in those jurisdictions where it is legal to do so.

The FGC has retained HSBC Securities (USA) Inc. ("HSBC") and BofA Merrill Lynch and to act as dealer managers and solicitation agents in connection with the Tender Offer and Consent Solicitations. Questions regarding the Tender Offer and Consent Solicitations may be directed to HSBC at +1 (888) HSBC-4LM (toll free) or +1 (212) 525-5552 (collect) or BofA Merrill Lynch at +1 (888) 292-0070 (toll free) or +1 (646) 855 3401 (collect).

Neither the Offer Document nor any related documents have been filed with the U.S. Securities and Exchange Commission, nor have any such documents been filed with or reviewed by any federal or state securities commission or regulatory authority of any country. No authority has passed upon the accuracy or adequacy of the Offer Document or any related documents, and it is unlawful and may be a criminal offense to make any representation to the contrary.

This announcement is not an offer to purchase, a solicitation of an offer to purchase or a solicitation of consents. The Tender Offer and Consent Solicitations are being made solely pursuant to the Offer Document. The Tender Offer and Consent Solicitations are not being made to, nor will the FGC accept tenders of Notes and deliveries of consents from, holders in any jurisdiction in which the Tender Offer, Consent Solicitations or the acceptance thereof would not be in compliance with the securities or blue sky laws of such jurisdiction.

About the FGC, the Bank and the Temporary Regime

The Bank is a private commercial bank which focuses on the paycheck-deductible loan and credit card loan segments in Brazil. On June 4, 2012 the Central Bank imposed a temporary special administration regime, governed by Decree-Law No. 2,321, of February 25, 1987, as amended (Regime de Administracao Especial Temporaria, "Temporary Regime") with respect to the Bank and its financial affiliates for a period of 180 days, which may be extended by the Central Bank in its sole discretion by an additional 180 days. The Central Bank imposed the Temporary Regime on the basis of a detected inconsistency of approximately R$1.3 billion (U.S.$633 million) in the loan portfolio owned by the Bank, as well as a related breach of accounting rules. The Temporary Regime is a less restrictive form of Central Bank intervention in private and non-federal public financial institutions. The Temporary Regime allows the Bank to continue operating normally and its main purpose is to assist with the recovery of the financial condition of the Bank. It does not affect the day-to-day business operations of the Bank.

The Central Bank froze the personal assets of the current controlling shareholders of the Bank, replaced the board of directors and the executive board of the Bank and appointed the FGC as temporary special administrator. The FGC appointed several external advisors, including PricewaterhouseCoopers Contadores Publicos Ltda., to help the FGC perform its due diligence on the financial information of the Bank. The FGC is a private and independent non-profit institution, with the corporate purpose of rendering guarantees to associated institutions upon the intervention or extrajudicial liquidation or the insolvency of such institutions, as recognized by the Central Bank.

On August 15, 2012 the Bank published a notice (Fato Relevante) to the market, which published a special balance sheet of the Bank as of June 4, 2012, appearing in the Offer Document and informed the market of the FGC's intent to (i) acquire the Notes pursuant to the Tender Offer as well as a certain amount of local debt obligations of the Bank, (ii) convert a portion of the debt obligations into equity by canceling the obligations, and (iii) sell the Bank to a Potential Acquirer. If the conditions to the Tender Offer are not met, the FGC believes the Bank will be liquidated.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This press release contains statements that are forward-looking within the meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. Forward-looking statements are only predictions and are not guarantees of future performance. These statements are subject to known and unknown risks, uncertainties and other factors which may cause the FGC or the Bank's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Although the FGC believes that the expectations and assumptions reflected in the forward-looking statements are reasonable based on information currently available to the FGC, the FGC cannot guarantee future results or events. The FGC expressly disclaims a duty to update any of the forward-looking statements.

SOURCE Fundo Garantidor de Creditos