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PBR » Topics » Indentures

This excerpt taken from the PBR 20-F filed Jun 30, 2005.

Indentures

 

PIFCo issued each series of Senior Notes pursuant to an indenture between PIFCo, as the issuer, and The Bank of New York, as trustee. The terms of the indentures require PIFCo and its subsidiaries, among other things, to:

 

  •   pay all amounts owed by it under the indenture and the notes when such amounts are due, and perform each of its other obligations under the various transaction documents entered into by it in connection with the issuance of the notes;

 

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  •   comply with all applicable laws and maintain all necessary governmental approvals;

 

  •   pay all uncontested taxes;

 

  •   preserve its existence and maintain our properties;

 

  •   maintain adequate insurance;

 

  •   maintain its books and records in accordance with U.S. GAAP;

 

  •   maintain an office or agency in New York for the purpose of service of process;

 

  •   ensure that the notes continue to be its senior obligations;

 

  •   use proceeds from the issuance of the notes for specified purposes, namely the purchase of oil imports and the repayment of short-term indebtedness;

 

  •   give notice to the trustee of any default or event of default under the indenture or certain currency control events in Brazil;

 

  •   provide certain financial statements to the trustee;

 

  •   take actions to maintain the trustee’s or the noteholders’ rights under the relevant transaction documents;

 

  •   maintain the required coverage amount;

 

  •   provide certain information to noteholders required by Rule 144A; and

 

  •   replace the trustee upon any resignation or removal thereof.

 

In addition, the terms of the indenture restrict PIFCo’s ability and the ability of its subsidiaries, among other things, to:

 

  •   undertake certain mergers, consolidations or similar transactions;

 

  •   create certain liens on its assets or pledge its assets; and

 

  •   enter into certain transactions with its affiliates.

 

These covenants are subject to a number of terms, conditions and further qualifications.

 

The indenture also contains certain events of default, consisting of the following:

 

  •   failure to pay principal when due;

 

  •   failure to pay interest within 30 days of any interest payment date;

 

  •   inaccuracy of any representation or warranty made by PIFCo or us in any transaction document or in certain specified other certificates when made;

 

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  •   breach of a covenant or agreement in the indenture, the standby purchase agreement and other relevant transaction documents by PIFCo or us;

 

  •   acceleration of or failure to make a payment on PIFCo’s indebtedness or our indebtedness or the indebtedness of one of our material subsidiaries that equals or exceeds a specified threshold;

 

  •   a final judgment against PIFCo, us or a material subsidiary of ours that equals or exceeds a specified threshold;

 

  •   certain events of bankruptcy, liquidation or insolvency of PIFCo, us or any material subsidiary of ours;

 

  •   certain events relating to the unenforceability of the relevant transaction documents against PIFCo or us;

 

  •   the cancellation, termination (other than as permitted in the indenture) or unenforceability of the letter of credit unless an equivalent letter of credit is promptly provided or an equivalent amount in U.S. dollars is promptly deposited in the reserve account;

 

  •   we cease to own at least 51% of PIFCo’s outstanding voting shares; and

 

  •   we or PIFCo shall fail to comply with our obligations with respect to the required coverage amount.

 

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