Arcos Dorados Announces Tender and Exchange Offer and Consent Solicitation

  Arcos Dorados Announces Tender and Exchange Offer and Consent Solicitation

Business Wire

BUENOS AIRES, Argentina -- September 10, 2013

Arcos Dorados Holdings Inc. (the “Company”) (NYSE:ARCO) announced today that
it has commenced an offer to exchange any and all of Arcos Dorados B.V.’s
outstanding 7.50% Senior Notes due 2019 (CUSIP Nos. 03965TAA1 and P04568AA2
(Reg S) and ISIN Nos. US03965TAA16 and USP04568AA23 (Reg S)) (the “2019
Existing Notes”) held by Eligible Holders (as defined below) for the Company’s
newly issued US dollar-denominated 6.625% Senior Notes due 2023 (the “New
Notes”) (the “Exchange Offer”), an offer to purchase for cash any and all
outstanding 2019 Existing Notes (the “Tender Offer”) and a solicitation of
consents to proposed amendments to the indenture for the 2019 Existing Notes
(collectively, the “Tender and Exchange Offer and Consent Solicitation”). The
New Notes will be senior unsecured indebtedness and will rank equally with all
of the Company’s other existing and future senior unsecured indebtedness. The
Company has also announced an offering of Concurrent New Notes (as defined
below) (the “Concurrent Offering”). The Company intends to apply the net
proceeds from the Concurrent Offering, after deducting fees, commissions and
expenses relating to the Concurrent Offering and the Tender and Exchange Offer
and Consent Solicitation, to pay the principal and premium on the 2019
Existing Notes in connection with the Tender Offer, to repay certain of its
short-term indebtedness with Banco Itau BBA S.A., to unwind its cross-currency
interest rate swap with Bank of America, N.A. and for general corporate
purposes (including possible capital expenditures depending on cash
availability at year-end). The purpose of the Tender and Exchange Offer and
Consent Solicitation is to extend the maturity profile of the Company’s debt.

Tender and Exchange Offer Deadline

The Tender Offer will expire at 5:00 PM, New York City time, on September 23,
2013, unless extended (such time and date, as the same may be extended, the
“Tender Expiration Date”). Eligible Holders who validly tender 2019 Existing
Notes in the Tender Offer by the Tender Expiration Date will be entitled to
the Tender Consideration (as described below). The Exchange Offer will expire
at 11:59 PM, New York City time, on October 7, 2013, unless extended (such
time and date, as the same may be extended, the “Exchange Expiration Date”).
Eligible Holders who validly tender 2019 Existing Notes for exchange by 5:00
PM, New York City time, on September 23, 2013, unless extended (such time and
date, as the same may be extended, the “Early Exchange Date”), will receive
the Total Exchange Consideration (as described below). Eligible Holders who
validly tender 2019 Existing Notes for exchange after the Early Exchange Date,
but on or prior to the Exchange Expiration Date, will receive the Exchange
Consideration (as described below). 2019 Existing Notes tendered in the Tender
Offer or the Exchange Offer and delivered Consents (as defined below) may be
withdrawn prior to 5:00 PM, New York City time, on September 23, 2013 (such
time and date, as the same may be extended, the “Withdrawal Deadline”).
Holders may withdraw tendered 2019 Existing Notes and revoke their Consents at
any time prior to the Withdrawal Deadline, but holders may not withdraw their
tendered 2019 Existing Notes or revoke their Consents on or after the
Withdrawal Deadline except as required by applicable law.

Tender and Exchange Offer Consideration

The following table summarizes the consideration payable in the Tender and
Exchange Offer and Consent Solicitation for 2019 Existing Notes validly
tendered (and not validly withdrawn) and accepted by Arcos Dorados B.V.:

                 Tender Offer:
                 For each
                 US$1,000.00          Exchange Offer:
               Principal Amount   For each US$1,000.00 Principal Amount
                 of 2019 Existing     of 2019 Existing Notes Tendered:
                 Notes
                 Tendered:
                                                              Exchange
                                      Total Exchange          Consideration if

                                      Consideration if        Tender Occurs
                                      Tender                  After the
Series of        Tender
Existing         Consideration        Occurs on or Prior    Early Exchange
Notes                                 to                      Date and on

                                      the Early Exchange      or prior to the
                                      Date                    Exchange

                                                              Expiration Date
7.50% Senior     US$1,082.50 cash     US$1,092.50             US$1,062.50
Notes due        payment              principal amount of     principal amount
2019                                  New Notes               of New Notes
                                                              

Eligible Holders of 2019 Existing Notes who validly tender 2019 Existing Notes
in the Exchange Offer, and whose tender is accepted by the Company, will
receive, in exchange for each US$1,000.00 principal amount of 2019 Existing
Notes exchanged: in the case of 2019 Existing Notes tendered by the Early
Exchange Date, US$1,092.50 principal amount of New Notes; and in the case of
2019 Existing Notes tendered after the Early Exchange Date, but on or prior to
the Exchange Expiration Date, US$1,062.50 principal amount of New Notes. The
Exchange Consideration is an amount equal to the Total Exchange Consideration
less the Early Exchange Payment. The Early Exchange Payment is equal to
US$30.00 and is payable in New Notes. Cash in lieu of any fractional portion
less than US$1,000.00 principal amount of a New Note issued due to rounding
will be paid on the applicable settlement date based on the Total Exchange
Consideration or the Exchange Consideration, as the case may be.

Eligible Holders of 2019 Existing Notes who validly tender 2019 Existing Notes
in the Tender Offer, and whose tender is accepted by the Company, will
receive, for each US$1,000.00 principal amount of 2019 Existing Notes tendered
for cash on or prior to the Tender Expiration Date, an amount in cash in US
dollars equal to US$1,082.50 (the “Tender Consideration”).

Eligible Holders of 2019 Existing Notes properly tendered in either the Tender
Offer or the Exchange Offer (and not validly withdrawn) will be entitled to
receive in cash accrued and unpaid interest on their tendered or exchanged
2019 Existing Notes, as the case may be, up to, but not including, the Cash
Tender Settlement Date, the Early Exchange Settlement Date or the Final
Settlement Date, as the case may be (all as defined below), in addition to the
consideration that such holder would receive in the Tender and Exchange Offer
and Consent Solicitation. Notwithstanding the foregoing, holders of 2019
Existing Notes whose 2019 Existing Notes are purchased in exchange for New
Notes on the Final Settlement Date will be entitled to receive accrued and
unpaid interest in cash on such 2019 Existing Notes up to, but not including,
the Final Settlement Date less interest accrued on the New Notes from the
Concurrent Offering Settlement Date (as defined below) to, but not including,
the Final Settlement Date; provided that the amount of the accrued interest on
the New Notes that is deducted will in no event exceed the amount of accrued
interest on the 2019 Existing Notes.

The Tender and Exchange Offer and Consent Solicitation is conditioned on (i)
there having been validly tendered (and not validly withdrawn), on or prior to
the Tender Expiration Date and/or the Early Exchange Date, as the case may be,
more than US$154,400,000.00 aggregate principal amount of 2019 Existing Notes
in the Tender Offer, the Exchange Offer or both; (ii) the aggregate amount of
New Notes and/or Concurrent New Notes to be issued in the Exchange Offer
and/or the Concurrent Offering being equal to or greater than
US$300,000,000.00 and the proceeds received by the Company in the Concurrent
Offering being equal to or greater than the aggregate dollar amount of the
Tender Consideration; and (iii) the New Notes issued in the Exchange Offer on
the Early Exchange Settlement Date or the Final Settlement Date, as the case
may be, being fungible for U.S. federal income tax purposes with the
Concurrent New Notes issued in the Concurrent Offering. Completion of the
Tender and Exchange Offer and Consent Solicitation is also subject to the
satisfaction or waiver of a number of general conditions set forth in the
Tender and Exchange Offer and Consent Solicitation Statement (as defined
below). Concurrent New Notes to be issued in the Concurrent Offering will be
on terms and conditions acceptable to the Company in its sole discretion.

Consent Solicitation for Proposed Amendments

In conjunction with the Tender Offer and the Exchange Offer, Arcos Dorados
B.V. is soliciting consents (the “Consents”) to certain proposed amendments
(the “Proposed Amendments”) to the indenture under which the 2019 Existing
Notes were issued. The Proposed Amendments would eliminate Arcos Dorados
B.V.’s obligations to comply with substantially all of the restrictive
covenants contained in such indenture (as supplemented by supplemental
indentures). Adoption of the Proposed Amendments requires the consent of
holders of 2019 Existing Notes representing at least a majority in aggregate
principal amount of the outstanding 2019 Existing Notes held by persons other
than Arcos Dorados B.V. and its affiliates. Holders may not deliver Consents
without tendering their 2019 Existing Notes and holders may not tender their
2019 Existing Notes without delivering Consents.

The terms and conditions of the Tender and Exchange Offer and Consent
Solicitation are set forth in a tender and exchange offer and consent
solicitation statement dated September 10, 2013 (the “Tender and Exchange
Offer and Consent Solicitation Statement”) and the related letter of
transmittal and consent. The Company may amend, extend or terminate the Tender
and Exchange Offer and Consent Solicitation.

Further Information

The Tender and Exchange Offer and Consent Solicitation is being made only to
holders of 2019 Existing Notes who have properly completed, executed and
delivered to the information and exchange agent an eligibility letter, whereby
such holder has represented to the Company that it is (i) a “qualified
institutional buyer,” or “QIB,” as defined in Rule 144A under the Securities
Act of 1933, as amended (the “Securities Act”) and under applicable state
securities laws; or (ii) a “non-US Person” (as defined in Regulation S under
the Securities Act) (the “Eligible Holders”), and if in any member state of
the European Economic Area which has implemented Directive 2003/71/EC (the
“Prospectus Directive,” which term includes amendments thereto, including
Directive 2010/73/EU), a “qualified investor” (as defined in the Prospectus
Directive).

The Company expects to purchase all 2019 Existing Notes accepted by it in the
Tender Offer on or about September 27, 2013 (the “Cash Tender Settlement
Date”). In addition, at a date after the Early Exchange Date and prior to the
Exchange Expiration Date, the Company may elect to accept for exchange all
2019 Existing Notes validly tendered prior to the Early Exchange Date (such
date, the “Early Exchange Acceptance Date”). Payment for all 2019 Existing
Notes validly tendered prior to the Early Exchange Date will be made promptly
following the Early Acceptance Date, if any (the “Early Exchange Settlement
Date”). Promptly following the Exchange Expiration Date, the Company will
accept for exchange (the “Final Acceptance Date”) any and all validly tendered
2019 Existing Notes not previously purchased, subject to the terms and
conditions of the Tender and Exchange Offer and Consent Solicitation
Statement. Such payment will be made promptly following the Final Acceptance
Date (the “Final Settlement Date”). The Company intends to settle the
Concurrent Offering on or about September 27, 2013 (the “Concurrent Offering
Settlement Date”). The Early Exchange Date, if any, will be the same date as
the Concurrent Offering Settlement Date.

The NEW notes have not been AND WILL NOT BE registered under the Securities
Act of 1933, as amended, and may not be offered or sold in the United States
absent registration or an applicable exemption from the registration
requirements. THE NEW NOTES ARE BEING ISSUED ONLY TO ELIGIBLE HOLDERS.

D.F. King & Co., Inc. has been appointed as the information and exchange agent
for the Tender and Exchange Offer and Consent Solicitation. Holders may
contact the information and exchange agent to request the eligibility letter.
Banks and brokers call: (212) 269-5550. All others call toll free: (800)
488-8095. Email: arcosdorados@dfking.com.

This press release is not an offer to sell or a solicitation of an offer to
buy any security. The Tender Offer and the Exchange Offer are being made
solely by the Tender and Exchange Offer and Consent Solicitation Statement and
the related letter of transmittal and consent, and only to such persons and in
such jurisdictions as are permitted under applicable law.

About Arcos Dorados

Arcos Dorados is the world’s largest McDonald’s franchisee in terms of
systemwide sales and number of restaurants, operating the largest quick
service restaurant (“QSR”) chain in Latin America and the Caribbean. It has
the exclusive right to own, operate and grant franchises of McDonald’s
restaurants in 20 Latin American and Caribbean countries and territories,
including Argentina, Aruba, Brazil, Chile, Colombia, Costa Rica, Curaçao,
Ecuador, French Guyana, Guadeloupe, Martinique, Mexico, Panama, Peru, Puerto
Rico, St. Croix, St. Thomas, Trinidad & Tobago, Uruguay and Venezuela. The
Company operates or franchises 1,971 McDonald’s- branded restaurants with over
90,000 employees serving approximately 4.3 million customers a day, as of June
2013.

Cautionary Statement About Forward-Looking Statements

This press release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Forward-looking
statements often are proceeded by words such as “believes,” “expects,” “may,”
“anticipates,” “plans,” “intends,” “assumes,” “will” or similar expressions.
The forward-looking statements contained herein include statements about the
Tender and Exchange Offer and Consent Solicitation and the Concurrent
Offering. These expectations may or may not be realized. Some of these
expectations may be based upon assumptions or judgments that prove to be
incorrect. In addition, Arcos Dorados’ business and operations involve
numerous risks and uncertainties, many of which are beyond the control of
Arcos Dorados, which could result in Arcos Dorados’ expectations not being
realized or otherwise materially affect the financial condition, results of
operations and cash flows of Arcos Dorados. Some of the factors that could
cause future results to materially differ from recent results or those
projected in forward-looking statements are described in Arcos Dorados’
filings with the United States Securities and Exchange Commission.

The forward-looking statements are made only as of the date hereof, and Arcos
Dorados does not undertake any obligation to (and expressly disclaims any
obligation to) update any forward-looking statements to reflect events or
circumstances after the date such statements were made, or to reflect the
occurrence of unanticipated events. In light of the risks and uncertainties
described above, and the potential for variation of actual results from the
assumptions on which certain of such forward-looking statements are based,
investors should keep in mind that the results, events or developments
disclosed in any forward-looking statement made in this document may not
occur, and that actual results may vary materially from those described
herein, including those described as anticipated, expected, targeted,
projected or otherwise.

Contact:

Investor Relations
Sofia Chellew, +54 11 4711 2515
sofia.chellew@ar.mcd.com