BRF uses cash on hand to buy back bonds
July 20, 2020 |
Brazilian meat company offers to repurchase up to $1.84 bln in outstanding notes by July 24
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Brazilian meat company BRF plans to use cash on hand to repurchase up to $1.84 billion in outstanding bonds, rather than issue fresh debt to fund the buyback, a company spokesperson told LatinFinance on Friday.
"There is no new debt issuance being considered for this transaction," Flávia Ferreira said. "BRF's strong liquidity – BRL9 billion at the end of March 2020 – will be used to fund the tender offer."
BRF said Friday that it offered to buy back bonds from four series of notes in US dollars and one in euros. The company said it could repurchase up to $109 million of its 5.875% 2022 notes, $346 million of its 3.95% 2023 notes, $518 million of its 4.75% 2024 notes and $500 million of its 4.35% 2026 notes along with €325 million ($371 million) of its 2.75% 2022 notes.
According to the terms of the buyback, BRF offered to pay $1,050 for every $1,000 in dollar-denominated 2022 notes, $1,018.50 for every $1000 in 2023 notes, $1,031 for every $1,000 in 2024 notes and $992.50 for every $1,000 in 2026 notes as well as €1,015 for every €1,000 in euro-denominated 2022 notes.
Morgan Stanley is the dealer manager on the buyback, which expires on July 24.
In late May, BRF said it borrowed a total of BRL2.5 billion ($465 million) to increase short-term liquidity and face market volatility during the coronavirus pandemic. On March 30, the company said it had secured a total roughly BRL1.4 billion in one-year financing to add to its cash holdings.
BRF renegotiated roughly BRL2.3 billion in loans from Bradesco and Santander in October last year. It also held talks with Banco do Brasil and Itaú Unibanco.
The company had planned to merge with local rival Marfrig and create one of the largest meat companies in the world, but the deal fell through in July last year after the companies did not agree on a management structure.