Business Context and Reporting Period
This Form 6-K filing by Embraer S.A. is dated September 26, 2013. The document reports the final results of an Exchange Offer and Consent Solicitation for outstanding debt instruments issued by Embraer Overseas Limited and guaranteed by Embraer S.A. The Exchange Offer commenced on August 28, 2013, and concluded on September 25, 2013.
Key Financial Metrics
The filing focuses on debt restructuring rather than operational performance metrics such as revenue or profit. Key financial figures related to the transaction include:
- Old Notes Tendered: U.S.$146.4 million of 6.375% Notes due 2017 and U.S.$337.2 million of 6.375% Notes due 2020.
- Participation Rate: Approximately 54.95% of the total aggregate principal amount of Old Notes outstanding at the commencement of the offer.
- New Notes Issued: Approximately U.S.$540.5 million aggregate principal amount of new U.S. dollar-denominated Senior Notes due 2023.
- Exchange Prices: U.S.$1,070.31 per U.S.$1,000 principal amount for 2017 Notes; U.S.$1,068.31 per U.S.$1,000 principal amount for 2020 Notes.
Material Changes
The primary material change is the extension of the company's debt maturity profile. Approximately 55% of the targeted 2017 and 2020 debt has been exchanged for new notes maturing in 2023. Additionally, the indenture governing the 2020 Notes was successfully amended following the consent solicitation, whereas the requisite consents for amending the 2017 Notes indenture were not received. The 2020 Notes are intended to be delisted from the New York Stock Exchange.
Guidance, Outlook, and Risks
The filing contains no specific financial guidance or operational outlook. Management commentary is limited to the mechanics of the exchange and settlement dates. The document includes a standard disclaimer regarding forward-looking statements, citing risks related to global economic conditions, capital markets, the cyclical nature of the aircraft production business, and global competition. A specific contingency noted is that the interest rate on the New Notes may increase if the Issuer fails to comply with registration obligations under the Registration Rights Agreement.
Investor Verification Checklist
- Verify the final settlement date of September 30, 2013, for notes tendered after the Early Participation Date.
- Confirm the delisting status of the 2020 Notes from the New York Stock Exchange.
- Review the Registration Rights Agreement to understand conditions under which the interest rate on the New Notes may increase.
- Note that the consent solicitation for the 2017 Notes indenture amendments failed, meaning those terms remain unchanged.
- Check subsequent filings for the impact of the debt restructuring on the company's overall liquidity and leverage ratios.