Business Context and Reporting Period
This Form 6-K filing by Embraer S.A. is dated September 12, 2013. The report details the results of the early exchange period for an Exchange Offer and Consent Solicitation regarding outstanding debt instruments issued by Embraer Overseas Limited and guaranteed by Embraer S.A.
Key Financial Metrics and Transaction Details
The filing focuses on a debt restructuring transaction rather than operational financial performance. Key metrics include:
- Notes Tendered: U.S.$144.0 million of 6.375% Notes due 2017 and U.S.$331.5 million of 6.375% Notes due 2020.
- Participation Rate: Approximately 54.0% of the total outstanding "Old Notes" were validly tendered.
- New Debt Issuance: Embraer expects to issue approximately U.S.$532 million in aggregate principal amount of new Senior Notes due 2023.
- Exchange Prices: The Total Exchange Price is $1,120.31 per $1,000 principal for 2017 Notes and $1,118.31 per $1,000 principal for 2020 Notes.
- New Interest Rate: The new notes bear interest at 5.696% per annum.
- Settlement Date: Expected on September 16, 2013.
Material Changes and Status
The primary material change is the reduction of outstanding debt maturities in 2017 and 2020 in favor of a single maturity in 2023. Regarding the Consent Solicitation to amend indentures:
- 2020 Notes: Requisite consents have been obtained; amendments will be adopted.
- 2017 Notes: Requisite consents have not yet been received. The deadline for adoption is September 25, 2013, unless extended.
- Delisting: The Issuer intends to delist the 2020 Notes from the New York Stock Exchange.
Outlook, Risks, and Contingencies
Management notes that the new notes are subject to a Registration Rights Agreement. If the Issuer fails to comply with obligations to exchange or register the notes, the interest rate may increase. The filing includes standard forward-looking statement disclaimers citing risks related to global economic conditions, capital markets, the cyclical nature of aircraft production, and global competition. The filing text does not provide specific operational guidance or revenue forecasts for the upcoming fiscal periods.
Investor Verification Checklist
- Verify the final settlement of the exchange on September 16, 2013, and the actual issuance of the $532 million in new notes.
- Confirm whether the requisite consents for the 2017 Notes indenture amendments are received by the September 25, 2013 deadline.
- Monitor the delisting status of the 2020 Notes from the New York Stock Exchange.
- Review the Registration Rights Agreement terms to understand conditions under which the 5.696% interest rate on new notes may increase.