ISA Capital do Brasil S.A. Announces Expiration of Tender Offer for Its 8.800% Senior Notes Due 2017

SAO PAULO, March 9 /PRNewswire/ -- ISA CAPITAL DO BRASIL S.A. (the "Company"), a stock corporation (sociedade por acoes) organized under the laws of Brazil, announced today that its cash tender offer and consent solicitation for its outstanding 8.800% Senior Notes due 2017 (the "Notes"), expired at 5:00 p.m., New York City time, on March 8, 2010 (the "Expiration Date").

A total of U.S.$322,349,000.00 aggregate principal amount of the Notes (approximately 91.06% of the aggregate principal amount of the Notes outstanding) were tendered and not withdrawn before the Expiration Date.

The Total Consideration per U.S.$1,000 principal amount of Notes was U.S.$1,117.50, which included a consent payment equal to U.S.$35.00 per U.S.$1,000 principal amount of Notes (the "Consent Payment").  Holders who validly tendered their Notes after 5:00 p.m., New York City time, on February 24, 2010 but prior to 5:00 p.m., New York City time, on the Expiration Date, will receive the Tender Consideration of U.S.$1,082.50 per U.S.$1,000 principal amount of Notes, which corresponds to the Total Consideration minus the Consent Payment.

The Company will pay the Tender Consideration or Total Consideration, as applicable, as promptly as practicable after the Expiration Date and acceptance by the Company of validly tendered Notes (the "Payment Date").  All holders who validly tendered their Notes in the tender offer and whose Notes were accepted for purchase by the Company will also receive accrued and unpaid interest per U.S.$1,000 principal amount of Notes from the last interest payment date to, but not including, the Payment Date.

Promptly after the Consent Date, the Company and The Bank of New York Mellon, as trustee, executed an indenture supplement (the "Indenture Supplement") to the indenture governing the Notes (the "Indenture") to, among other things, eliminate substantially all of the restrictive covenants and certain event of default provisions in the Indenture.  Upon the Company's acceptance for purchase of the Notes validly tendered prior to the Expiration Date and the delivery of a notice to such effect to the Trustee, the Indenture Supplement will become effective.  

Holders can obtain additional copies of the Offer to Purchase and Consent Solicitation Statement and related material from the Information, Tender and Consent Agent, Global Bondholder Services Corporation at (866) 873-6300 (toll free) or at (212) 430-3774 (call collect). The Company has retained HSBC Securities (USA) Inc. ("HSBC") to act as sole Dealer Manager and Solicitation Agent.  Holders with questions about the Offer to Purchase and Consent Solicitation can contact HSBC's Liability Management Group at (888) HSBC-4LM (toll-free) or +1 (212) 525-5552 (collect) or via e-mail at [email protected].

The tender offer and consent solicitation were made solely on the terms and conditions set forth in the Offer to Purchase and Consent Solicitation Statement dated February 8, 2010 (the "Offer to Purchase and Consent Solicitation Statement"). This communication is for informational purposes only and is qualified by reference to the Offer to Purchase and Consent Solicitation Statement.  Under no circumstances shall this press release constitute an offer to buy or the solicitation of an offer to sell any securities of the Company.  

About ISA Capital do Brasil S.A.

The Company is a Brazilian stock corporation (sociedade por acoes) formed on April 28, 2006 to participate in the sale by the government of the State of Sao Paulo of approximately 31.34 billion shares of CTEEP's common stock representing 50.10% of the CTEEP common stock and 21% of the CTEEP capital stock.  As of the date of the Offer to Purchase and Consent Solicitation Statement, the Company owned approximately 89.4% of CTEEP's common stock and 37.5% of CTEEP's capital stock.  The Company is a holding company and engages only in limited business activities.  CTEEP is a Brazilian publicly-traded company engaged in the business of transmitting electricity from generation facilities to distribution networks and independent consumers.  For more information, visit www.isacapital.com.br.

Forward-Looking Statements

Some of the statements made in this press release are forward looking in nature.  These statements are based on management's current expectations or beliefs.  These forward looking statements are not a guarantee of performance and are subject to a number of uncertainties and other factors, many of which are outside the Company's control, which could cause actual events to differ materially from those expressed or implied by the statements.  Statements in this press release should be evaluated in light of these important factors. The Company is under no obligation to, and expressly disclaims any such obligation to, update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise.

THE NOTES HAVE NOT BEEN REGISTERED, AND WILL NOT BE REGISTERED, UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY OTHER APPLICABLE  SECURITIES LAWS, AND THE NOTES MAY NOT BE OFFERED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT (1) TO QUALIFIED INSTITUTIONAL BUYERS AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT ("QIBs"), (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT OR (3) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULES 144 UNDER THE SECURITIES ACT (IF AVAILABLE).

THE OFFER TO PURCHASE AND CONSENT SOLICITATION STATEMENT MAY NOT BE DELIVERED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OR, U.S. PERSONS, EXCEPT TO (1) QIBs OR (2) DEALERS OR OTHER PROFESSIONAL FIDUCIARIES ORGANIZED, INCORPORATED OR (IF AN INDIVIDUAL) RESIDENT IN THE UNITED STATES HOLDING DISCRETIONARY ACCOUNTS OR SIMILAR ACCOUNTS (OTHER THAN AN ESTATE OR TRUST) FOR THE BENEFIT OR ACCOUNT OF NON-U.S. PERSONS.

THE OFFER TO PURCHASE AND CONSENT SOLICITATION IS NOT BEING MADE TO HOLDERS IN ANY JURISDICTION IN WHICH THE MAKING OF THE OFFER TO PURCHASE AND CONSENT SOLICITATION OR THE ACCEPTANCE OF THE TENDERED NOTES OR THE CONSENTS WOULD NOT BE IN COMPLIANCE WITH THE LAWS OF SUCH JURISDICTION.

SOURCE ISA Capital do Brasil S.A.