Embraer Announces Exchange Offer and Consent Solicitation for the Outstanding
6.375% Notes Due 2017 and 6.375% Notes Due 2020 Issued by Embraer Overseas
Limited and Guaranteed by Embraer S.A.
SAO JOSE DOS CAMPOS, Brazil, Aug. 29, 2013
SAO JOSE DOS CAMPOS, Brazil, Aug. 29, 2013 /PRNewswire/ -- Embraer S.A.
("Embraer") (NYSE: ERJ; BM&FBOVESPA: EMBR3) hereby announces that on August
28, 2013, it has commenced an offer to exchange the outstanding 6.375% Notes
due 2017 and 6.375% Notes due 2020 issued by Embraer Overseas Limited (the
"Issuer") and guaranteed by Embraer (the "Old Notes") held by Eligible Holders
(as defined below) for newly issued U.S. dollar-denominated Senior Notes (the
"New Notes") due 2023 issued by the Issuer and guaranteed by Embraer (the
"Exchange Offer") and the solicitation of consents (the "Consents") to
proposed amendments (the "Proposed Amendments") to the indentures governing
the Old Notes (the "Consent Solicitation" and, together with the Exchange
Offer, the "Exchange Offer and Consent Solicitation"). The Exchange Offer and
Consent Solicitation is being conducted by Embraer upon the terms and subject
to the conditions set forth in a confidential offering memorandum dated August
28, 2013 (the "Offering Memorandum") and related letter of transmittal.
The Exchange Offer and Consent Solicitation will expire at 11:59 p.m. (New
York City Time) on September 25, 2013, unless extended (such time and date, as
the same may be extended, the "Expiration Date"). Eligible Holders who validly
tender Old Notes for exchange by 5:00 p.m. (New York City time) on September
11, 2013, unless extended (such time and date, as the same may be extended,
the "Early Participation Date"), will receive the Total Exchange Price (as
described below). Eligible Holders who validly tender Old Notes for exchange
after the Early Participation Date, but on or prior to the Expiration Date,
will receive the Exchange Price (as described below).
Exchange Offer Summary Table
Aggregate Reference Fixed Hypothetical
Title Principal U.S. Spread Hypothetical Total
CUSIP/ISIN No. of Amount Treasury Exchange Exchange
Series Outstanding Securities (in basis Price(2) Price(2)(3)
due U.S.$380.1 2.50% due
29081YAA4/US29081YAA47 Jan. million August 15, -29 bps U.S.$1,075.04 U.S.$1,125.04
due U.S.$500.0 2.50% due
29081YAC0/US29081YAC03 Jan. million August 15, +133 bps U.S.$1,076.46 U.S.$1,126.46
1 The Reference United States Treasury Security used to determine the Total
Exchange Price (as defined below) for all of the Old Notes is the 2.50% United
States Treasury Security due August 15, 2023 (the "Reference Treasury").
2 Amount to be paid in New Notes per U.S.$1,000 principal amount of Old Notes
validly tendered for exchange by the Early Participation Date assuming the
satisfaction of certain customary conditions described under "Description of
the Exchange Offer and Consent Solicitation—Conditions to the Exchange Offer
and Consent Solicitation" in the Offering Memorandum and assuming a certain
treasury yield as described in Annex B of the Offering Memorandum. See Annex B
for details regarding the calculation of the hypothetical Exchange Price for
Old Notes tendered after the Early Participation Date (as defined below) but
before the Expiration Date (as defined below) and the Hypothetical Total
Exchange Price for Old Notes tendered before the Early Participation Date.
Actual amounts will be determined at the Pricing Time (as defined below). Does
not reflect any accrued and unpaid interest. We will pay accrued and unpaid
interest on the Old Notes up to, but not including, the applicable Settlement
Date (as defined in the Offering Memorandum).
3 The Total Exchange Price (as defined below) includes U.S.$50 principal
amount of the New Notes per U.S.$1,000 principal amount of the Old Notes that
is the Early Participation Payment (as defined below).
Old Notes tendered in the Exchange Offer may be withdrawn at any time prior to
5:00 p.m. (New York City time) on September 11, 2013, unless extended by the
Issuer (such time and date, as the same may be extended, the "Withdrawal
Deadline"). Eligible Holders may withdraw tendered Old Notes at any time prior
to the Withdrawal Deadline, but Eligible Holders may not withdraw their
tendered Old Notes on or after the Withdrawal Deadline except as required by
Eligible Holders that tender their Old Notes on or prior to the Early
Participation Date will receive as described in the Offering Memorandum, in
exchange for each US$1,000 of principal amount of Old Notes being exchanged, a
payment equal to the discounted value on the Early Participation Settlement
Date of the remaining payments of principal and interest (excluding accrued
and unpaid interest to but not including the Early Participation Settlement
Date) per U.S.$1,000 principal amount of the tendered series of Old Notes
through the maturity date of such Old Notes, using a yield equal to the sum,
as calculated by the dealer managers of the Exchange Offer, of (i) the
bid-side yield on the Reference Treasury (as defined in the Offering
Memorandum), as of 2:00 p.m., New York City time, on September 12, 2013 (the
"Pricing Time"), as displayed on the Bloomberg Government Pricing Monitor Page
PX1 (or any recognized quotation source selected by the dealer managers of the
Exchange Offer in their sole discretion if such quotation report is not
available or is manifestly erroneous) plus (ii) the applicable fixed spread in
the table above for the applicable tender of such series of Old Notes (the
"Total Exchange Price"). The Total Exchange Price will include a payment of
U.S.$50 per U.S.$1,000 principal amount of Old Notes tendered on or prior to
the Early Participation Date and accepted for exchange by us (the "Early
Participation Payment"). Eligible Holders who validly tender their Old Notes
after the Early Participation Date but prior to the Expiration Date will not
be eligible to receive the Early Participation Payment, but will be eligible
to receive only the "Exchange Price" for each US$1,000 in principal amount of
Old Notes validly tendered and accepted. Cash in lieu of any fractional
portion rounded down of a New Note will be paid on the applicable settlement
date based on the Total Exchange Price or the Exchange Price, as the case may
be. The terms and conditions of the Exchange Offer and Consent Solicitation
are set forth in the Offering Memorandum.
All Eligible Holders whose Old Notes are validly tendered and accepted for
exchange will also receive a cash payment equal to the accrued and unpaid
interest on their Old Notes accepted for exchange from the last applicable
interest payment date up to, but excluding, the applicable settlement date.
Notwithstanding any other provision of the Exchange Offer, the Issuer's
obligation to accept for exchange any Old Notes validly tendered is subject to
the satisfaction of certain general conditions described in the Offering
Memorandum, including (1) a minimum of US$300 million in New Notes being
issued and (2) that there will be no obligation to consummate the Exchange
Offer upon the occurrence of an event or events or the likely occurrence of an
event or events that would or might reasonably be expected to prohibit,
restrict or delay the consummation of the Exchange Offer and Consent
Solicitation or materially impair the contemplated benefits of the Exchange
Offer and Consent Solicitation. The Issuer may waive any of these conditions
prior to the Expiration Date, in its sole discretion. The Issuer may terminate
the Exchange Offer and Consent Solicitation or, at its option, modify, extend
or amend the Exchange Offer and Consent Solicitation if certain conditions
described in the Offering Memorandum, including those described above, are not
satisfied or waived on or prior to the Expiration Date.
The New Notes will be direct, unsecured, subordinated obligations and will
rank pari passu without preference among themselves. The New Notes will bear
interest at a rate per annum equal to the sum of (i) the bid-side yield on the
2.50% U.S. Treasury Note due August 15, 2023 as of the Pricing Time (based on
the bid-side price indicated on the Bloomberg Government Pricing Monitor Page
PX1 as of the Pricing Time (or any recognized quotation source selected by the
dealer managers of the Exchange Offer in their sole discretion if the
Bloomberg Government Pricing Monitor is not available or is manifestly
erroneous)), and (ii) 2.80% (280 basis points). Interest will accrue from, and
including, the Early Participation Settlement Date (as defined in the Offering
Memorandum) and will be payable semi-annually in arrears on each March 16 and
September 16 of each year, commencing on March 16, 2014. The New Notes will
mature on September 16, 2023. The Issuer and the Guarantor intend to enter
into a Registration Rights Agreement with the dealer managers for the Exchange
Offer (the "Registration Rights Agreement"). The interest rate on the New
Notes may increase in certain circumstances if the Issuer is not in timely
compliance with its obligation to exchange or register the Notes pursuant to
the terms of the Registration Rights Agreement.
Holders of Old Notes who want to participate in the Exchange Offer must
consent to the Proposed Amendments. The purpose of the Consent Solicitation is
to modify or eliminate certain provisions, including certain restrictive
covenants, events of default and certain other provisions under the indentures
governing the Old Notes. The Consent Solicitation is subject to, among other
things, the condition that the consents of holders representing at least a
majority in aggregate principal amount of the outstanding Old Notes have been
received and not revoked.
The Exchange Offer is being offered only to holders of Old Notes: (a) who are
"qualified institutional buyers," or "QIBs," as defined in Rule 144A under the
Securities Act of 1933, as amended (the "Securities Act"); and (b) "non-U.S.
persons", as defined in Regulation S under the Securities Act, and who are
eligible to participate in the Exchange Offer pursuant to the securities laws
of the jurisdiction in which they are located. Holders of Old Notes who: (i)
are eligible to participate in the Exchange Offer pursuant to at least one of
the foregoing conditions; and (ii) held Old Notes as of the Expiration Date
are referred to herein as "Eligible Holders."
The Exchange Offer and the New Notes have not been, and will not be,
registered under the Securities Act, or under the securities laws of any other
jurisdiction, except as contemplated by the Registration Rights Agreement. The
New Notes may not be offered within the United States or to, or for the
account or benefit of, U.S. persons, except to Eligible Holders in compliance
with Rule 144A or Regulation S under the Securities Act, as applicable. Only
Eligible Holders are authorized to receive or review the Offering Memorandum
or to participate in the Exchange Offer and Consent Solicitation.
The Exchange Offer and the New Notes have not been, and will not be,
registered with the Brazilian Comissao de Valores Mobiliarios (CVM). The
Exchange Offer and the New Notes may not be offered or sold in Brazil, except
in circumstances that do not constitute a public offering or unauthorized
distribution under Brazilian laws and regulations. The Exchange Offers and the
New Notes are not being offered into Brazil.
The Exchange Offer is not being made to persons in any jurisdiction in which
the making or acceptance thereof would not be in compliance with the
securities, blue sky or other laws of such jurisdiction.
For more information, contact D.F. King& Co., Inc., the exchange agent and
information agent for the Exchange Offer and Consent Solicitation (the
"Exchange Agent"), at +1-800-207-3158, or firstname.lastname@example.org.
Documents in connection with the Exchange Offer are available at the offices
of the Exchange Agent, D.F. King & Co., Inc., 48 Wall Street, 22nd Floor, New
York, New York 10005, Attn: Elton Bagley.
For further information, please contact:
+55-12-3927-4404 or email@example.com
This press release may include declarations about Embraer's expectations
regarding future events or results. All declarations based upon future
expectations, rather than historical facts, are subject to various risks and
uncertainties. Embraer cannot guarantee that such declarations will prove to
be correct. These risks and uncertainties include factors related to the
following: (a)the markets in which Embraer operates; (b)the global economy;
(c)capital markets; (d)the aircraft production business and its dependence
upon the global economy, which is cyclical by nature; and (e)the high degree
of global competition in the markets in which Embraer operates. To obtain
further information on factors that may give rise to results different from
those forecast by Embraer, please consult the reports filed with the Brazilian
Comissao de Valores Mobiliarios (CVM) and with the SEC, including Embraer's
most recent Annual Report on Form20-F and its reports on Form6-K.
Jose Antonio de Almeida Filippo
Executive Vice-President and Chief Financial and Investor Relations Officer
SOURCE Embraer S.A.
Press spacebar to pause and continue. Press esc to stop.