SWISS INSURED BRAZIL POWER FINANCE S.À R.L. ANNOUNCES COMMENCEMENT OF CONSENT SOLICITATION IN RELATION TO ITS OUTSTANDING 9.850% SENIOR SECURED NOTES DUE 2032 REG S CUSIP / ISIN: L8915M AA3 / USL8915MAA38 144A CUSIP / ISIN: 870880 AA9 / US870880AA90

LUXEMBOURG, Sept. 13, 2023 /PRNewswire/ -- Swiss Insured Brazil Power Finance S.à r.l., a private limited liability company (société à responsabilité limitée), incorporated and existing under Luxembourg law, having its registered office at 16, rue Eugène Ruppert, L – 2453 Luxembourg, Grand Duchy of Luxembourg, registered with the Luxembourg Register of Commerce and Companies under number B 217648 (the "Company") announced today that it has commenced a solicitation (the "Solicitation") of consents ("Consents") from each registered holder ("Holder") of its outstanding 9.850% Senior Secured Notes due 2032 (the "Notes"), issued and outstanding under the indenture (the "Indenture"), dated as of April 12, 2018, among the Company, CELSE – Centrais Elétricas de Sergipe S.A., a corporation (sociedade anônima) organized under the laws of Brazil, as guarantor ("CELSE"), and Citibank, N.A., as trustee (in such capacity, the "Trustee"), to permit the Company as sole holder (the "Debenture Holder") of certain debentures issued by CELSE (the "Existing Debentures") pursuant to an indenture (as amended from time to time, the "Debenture Indenture"), dated as of March 28, 2018, among CELSE, Pentágono S.A. Distribuidora de Títulos e Valores Mobiliários, as fiduciary agent (the "Fiduciary Agent") and Credit Suisse AG, in its capacities as policyholder and policyholder agent (the "Policyholder Agent"), to instruct the Fiduciary Agent to hold a debenture holders' meeting to consent to the proposed amendments and waivers to the Debenture Indenture (the "Debenture Indenture Amendment") to (i) include a new put option (the "New Put Option") for the repurchase by CELSE of 100% of the outstanding Existing Debentures from Debenture Holders as of the record date established for such repurchase (which shall be the business day prior to the repurchase date) at a price equal to the New Put Option Price (as defined below), plus accrued and unpaid interest thereon to, but excluding, the date of repurchase, which New Put Option would be triggered upon CELSE's issuance of a prepayment notice to the Senior Lenders (as defined below) pursuant to the Omnibus Waiver and Consent Agreement (as defined below) (the "New Put Event"), and such New Put Option Price to be paid to the Company no earlier than ten (10) Business Days, but no later than thirty (30) days from the date of exercise of such New Put Option; and (ii) provide a waiver to (1) Section 9.2(t) of the Debenture Indenture to permit CELSE to incur indebtedness in an aggregate principal amount sufficient to directly or indirectly fund the purchases, repayments and redemptions described in the Consent Solicitation Statement (as defined below)(the "New Indebtedness"), the proceeds of which will be used to fund the purchases, repayments and, indirectly, redemptions described in the Consent Solicitation Statement (the "Refinancing"); and (2) Section 9.2(oo) of the Debenture Indenture to allow CELSE to enter into agreements or arrangements necessary in connection with the Refinancing.

The Company is also soliciting Consents to permit the Company, as the Debenture Holder, to instruct the Fiduciary Agent to hold a debenture holders' meeting to consent to entering into a waiver and consent agreement with respect to: (1) the Common Terms Agreement, dated April 12, 2018 (as amended from time to time, the "Common Terms Agreement"), among CELSE, the Inter-American Investment Corporation ("IDB Invest"), the International Finance Corporation ("IFC" and, together with IDB Invest, the "Senior Lenders"), the Fiduciary Agent, the Policyholder Agent, and Citibank, N.A., as project intercreditor agent (the "Project Intercreditor Agent"); (2) the Amended and Restated Collateral Accounts and Security Agreement, dated February 4, 2019 (as amended from time to time, the "CELSE Accounts Agreement"), among CELSE, CELSEPAR – Centrais Elétricas de Sergipe S.A., Goldman Sachs Bank USA, as closing date LC issuer, Citibank, N.A., as offshore collateral agent and offshore account bank, Banco Citibank S.A., as onshore collateral agent and onshore account bank (in such capacity, the "Onshore Account Bank"), Credit Suisse AG, as Swiss account bank, Banco de Investimentos Credit Suisse (Brasil) S.A., as senior debentures conversion bank, the Fiduciary Agent, the Policyholder Agent and the Project Intercreditor Agent; and (3) that certain Loan Agreement, dated as of April 12, 2018, among CELSE and IFC (the "IFC Loan Agreement") and that certain Loan Agreement, dated as of April 12, 2018, among CELSE, IDB Invest, in its individual capacity (x) as lender; (y) as agent acting on behalf of IDB as lender; and (z) as agent acting on behalf of the IDB in IDB's capacity as administrator of the China Fund as lender (the "IDB Loan Agreement" and, together with the IFC Loan Agreement, the "Senior Loans"), to (i) provide a waiver to (1) Section 2.06(a) of the Common Terms Agreement, Section 3.06 of the IFC Loan Agreement and Section 3.06 of the IDB Loan Agreement, in each case, to allow CELSE to use the proceeds from the New Indebtedness to prepay the amounts due (a) to the Senior Lenders, among other parties thereto, under the Common Terms Agreement and the Senior Loans, (b) to the Company, represented by the Fiduciary Agent, under the Common Terms Agreement, and the Debenture Indenture, and (c) if any, the Policyholder Agent on behalf of SERV Swiss Export Risk Insurance ("SERV"); (2) Section 5.02(m) of the Common Terms Agreement to permit CELSE to incur the New Indebtedness; (3) Section 5.02(u) of the Common Terms Agreement to allow CELSE to execute (a) all documents required for the incurrence of the New Indebtedness; (b) a solicitation agent agreement, and all such other documents and agreements required to effect the Solicitation, and any waivers and consents described in the Consent Solicitation Statement; and (c) any such other documents and agreements required to give effect to any waivers and consents granted under the Omnibus Waiver and Consent Agreement; (4) Section 5.16(a) of the CELSE Accounts Agreement to allow CELSE to deposit the gross proceeds from the New Indebtedness in the Mandatory Prepayment Account (Onshore) (as defined in the Consent Solicitation Statement); (5) Section 5.16(b) of the CELSE Accounts Agreement to permit CELSE to instruct the Onshore Account Bank to transfer amounts deposited in the Mandatory Prepayment Account (Onshore) to (x) the Senior Lenders and other parties thereto; and (y) pay the New Put Option Price to the Company in order to consummate the exercise of the New Put Option in full and the acquisition of the Existing Debentures; (6) Section 5.16(c) of the CELSE Accounts Agreement to permit (x) if so required to effect the Refinancing the payment of the New Put Option Price to the Company and the repayment of the Senior Loans to occur on a date that is not an Interest Payment Date (as defined in the Common Terms Agreement); (y) the instruction to be given to the Onshore Account Bank to be in the form of the withdrawal/transfer certificate; and (z) such withdrawal/transfer certificate to be delivered to the Onshore Account Bank no later than five (5) Business Days prior to the date of such requested transfers; and (7) Section 5.17 of the CELSE Accounts Agreement to permit CELSE to transfer funds from the Mandatory Prepayment Account (Onshore) directly to the Company's account held with the Correspondent Bank (as defined in the Debenture Indenture) for purposes of settlement of the New Put Option Price; (ii) require prepayment of Senior Loans with a portion of the proceeds of the New Indebtedness; and (iii) permit all other actions required to effect the Refinancing (the "Omnibus Waiver and Consent Agreement" and, together with the Debenture Indenture Amendment, the "CELSE Proposed Amendments and Agreements").

Further, the Company is also soliciting Consents of the Holders to: (A) amend the Indenture to amend certain of the restrictive covenants contained therein to permit the Refinancing (the "Indenture Amendments"); and (B) authorize the Company to immediately exercise the New Put Option upon the occurrence of the New Put Event ("Put Option Exercise").

In addition, pursuant to the terms of the intercreditor agreement (the "Company Intercreditor Agreement"), dated as of April 12, 2018, among, inter alios, the Company, the Trustee and Citibank, N.A., as intercreditor agent, and the Debenture Indenture, Holders delivering Consents in the Solicitation will agree to modify the end of the decision period and the date of the general meeting of Debenture Holders to be a date that is as early as one (1) business day following the Expiration Time.

If the Requisite Consents are obtained and the CELSE Proposed Amendments and Agreements and the Indenture Amendments, are effected, in order to conform the Indenture to the Debenture Indenture Amendment and to the New Put Option Price, plus accrued and unpaid interest thereon to, but excluding, the date of repurchase, payable to Debenture Holders as of the record date established for such repurchase (which shall be the business day prior to the repurchase date) pursuant to the New Put Option exercise, the Supplemental Indenture will amend Section 3.1 of the Indenture to provide that the redemption price following exercise of the New Put Option will be equal to the New Put Option Price (the "New Redemption Price"), plus accrued and unpaid interest thereon to, but excluding, the date of redemption, which shall be the same date that the Existing Debentures are repurchased pursuant to the New Put Option exercise (such date, the "Redemption Date") to Holders of the Notes as of the record date established for such redemption (which shall be the business day prior to the Redemption Date).

The "New Put Option Price" and, as a result, the New Redemption Price, will be calculated pursuant to the language substantially in the following form:

The New Put Option Price (expressed as a percentage of outstanding principal amount Existing Debentures (i.e., after giving effect to the scheduled principal amortization payments on the Existing Debentures to and including the repurchase date)) will be equal to the lesser of:

• (a) the sum of the present values of the remaining scheduled payments of principal and interest on the Existing Debentures (after giving effect to the scheduled principal and interest payments on the Existing Debentures to and including the repurchase date) being repurchased, discounted to the repurchase date on a semi-annual basis (assuming a 360-day year of twelve 30-day months), at the Reference Rate (as defined below), less (b) accrued and unpaid interest to, but excluding, the repurchase date; and
• 100% of the outstanding principal amount of the Existing Debentures to be redeemed,

minus, in either case, the Consent Consideration (as defined below), multiplied by the Scaling Factor, payable pursuant to the Solicitation assuming 100% of the Holders delivered their Consents at or prior to the Expiration Time and such Consents were accepted by the Company for payment.

The "Reference Rate" will be determined by CELSE and will equal the reference rate of the BRL National Treasury Note (NTN-F) due January 1, 2029 (ISIN: BRSTNCNTF1Q6) (the "Reference Security"), as of the close of business on the business day prior to the date that the New Put Option is exercised, quoted by the Brazilian Financial and Capital Markets Association as the "Tx. Compra" for the Reference Security at the https://www.anbima.com.br/pt_br/informar/taxas-de-titulos-publicos.htm reference page (or any other recognized quotation source selected by CELSE if such quotation report is not available or is manifestly erroneous). CELSE's actions and determinations in determining the New Put Option Price will be conclusive and binding for all purposes, absent manifest error.

The Notes are currently listed on the Official List of the Luxembourg Stock Exchange (the "LuxSE") and admitted to trading on the Euro MTF market of the LuxSE.

The Solicitation is being made by means of the Company's consent solicitation statement, dated September 13, 2023 (the "Consent Solicitation Statement"). Holders are referred to the Consent Solicitation Statement for detailed terms and conditions of the Solicitation. The Solicitation will expire at 5:00 p.m. (New York City time) on September 20, 2023, unless extended or earlier terminated by the Company in its sole discretion (such date and time, including as extended or earlier terminated, the "Expiration Time"). Consents delivered may be validly revoked at any time prior to 5:00 p.m. (New York City time) on September 20, 2023, but not thereafter, except as required by applicable law.

The purpose of the Solicitation is to authorize CELSE and the Company to adopt the CELSE Proposed Amendments and Agreements and the Indenture Amendments, to authorize the Put Option Exercise and for CELSE to:

• upon the exercise of the New Put Option by the Company, fulfill its obligation to purchase 100% of the outstanding Existing Debentures; and
• repay all amounts outstanding under the IFC Loan Agreement and the IDB Loan Agreement;

and for the Company, in turn, to:

• repay all amounts outstanding under that certain uninsured loan credit agreement, dated as of April 12, 2018, among, inter alios, the Company, the lenders named therein (the "Uninsured Lenders"), and Citibank, N.A., as administrative agent (the "Uninsured Loan Agreement"); and
• redeem 100% of the Notes.

Concurrently with the Solicitation, CELSE and the Company, as applicable, are separately seeking consents to (i) the CELSE Proposed Amendments and Agreements and the Put Option Exercise from the Uninsured Lenders and SERV; and (ii) the CELSE Proposed Amendments and Agreements from the Senior Lenders. Pursuant to Section 5.06 of the Company Intercreditor Agreement, the Company must obtain the consent of both (i) Holders owning at least 56.25% aggregate outstanding principal amount of Notes; and (ii) the Uninsured Lenders owning at least 56.25% aggregate outstanding principal amount of debt under the Uninsured Loan Agreement (the "Intercreditor Requisite Consents") in order to consent to the CELSE Proposed Amendments and Agreements and the Put Option Exercise.  Pursuant to Section 9.1(b) of the Indenture, the Company must obtain the consent of Holders of more than 50% of the aggregate principal amount of Notes (the "Indenture Requisite Consents" and, together with the Intercreditor Requisite Consents, the "Requisite Consents") in order to effectuate the Indenture Amendments.

Subject to conditions set forth in the Consent Solicitation Statement, including the receipt of the Requisite Consents, Holders who validly deliver and not validly revoke their Consents at or prior to the Expiration Time pursuant to the terms of the Consent Solicitation Statement will be eligible to receive (i) a consent effectiveness payment of R$5.00 (the "Consent Effectiveness Payment") per R$1,000 Original Principal Amount of the Notes, multiplied by the Scaling Factor, and (ii) an additional consent consideration of R$25.00 (the "Additional Consent Consideration" and together with the Consent Effectiveness Payment, the "Consent Consideration") per R$1,000 Original Principal Amount  of the Notes, multiplied by the Scaling Factor. The Consent Consideration will be payable in two instalments. The Consent Effectiveness Payment will be payable on the initial settlement date, which is expected to be within three (3) business days after all conditions to the Solicitation have been satisfied (the "Initial Settlement Date").  The Additional Consent Consideration will be payable, at the sole discretion of CELSE, on either the Initial Settlement Date or the final settlement date, which will be the date that is the earlier of (a) 20 business days following the Expiration Time; and (b) the business day immediately prior to any date that the Notes are scheduled to be redeemed pursuant to the terms of the Indenture (the "Final Settlement Date").

The table below summarizes certain payment terms of the Solicitation. The originally issued principal amount of the Notes was R$3,201,500,000 (the "Original Principal Amount"). The Notes have subsequently had principal repaid such that the remaining principal amount outstanding was R$2,669,810,887.50 as of September 12, 2023 (the "Outstanding Principal Amount").  The Consent Consideration will be calculated with reference to a scaling factor equal to the quotient of (a) the remaining outstanding principal amount of Notes as of the Expiration Time, divided by (b) the Original Principal Amount of Notes (the "Scaling Factor"). As of September 12, 2023, the Scaling Factor was 83.3925%.

All descriptions of the Consent Effectiveness Payment, the Additional Consent Consideration and the Consent Consideration are before the application of the Scaling Factor. In addition, the descriptions of the New Put Option Price and the New Redemption Price are before application of the fact that the Existing Debentures and Notes are subject to principal amortization in accordance with their respective terms.

The Consent Consideration is denominated in Brazilian Reais but will be settled in U.S. dollars as converted based on the selling rate for Brazilian Reais into U.S. dollars reported by the Brazilian Central Bank on the "PTAX VENDA800" screen at 5:00 p.m. (São Paulo time) on the business day immediately following the Expiration Time (provided that if such selling rate is not available on the Brazilian Central Bank's "PTAX VENDA800" screen, then such other source as mutually agreed by the Company and the Sole Structuring and Lead Solicitation Agent (as defined below) shall be used). 

The Company has engaged Citigroup Global Markets Inc. as sole structuring and lead solicitation agent ("Sole Structuring and Lead Solicitation Agent"), and Banco Bradesco BBI S.A., Banco BTG Pactual S.A. – Cayman Branch, Itaú BBA USA Securities, Inc. and Santander US Capital Markets LLC, as co-solicitation agents (the "Co-Solicitation Agents" and, together with the Sole Structuring and Lead Solicitation Agent, the "Solicitation Agents") for the Solicitation. D. F. King & Co., Inc. has been engaged to act as the information agent (the "Information Agent") for the Solicitation. Any questions or requests for assistance concerning the terms of the Solicitation may be made to Citigroup Global Markets Inc. at [email protected], +1 (800) 558-3745 (toll free) or +1 (212) 723-6106 (collect), Banco Bradesco BBI S.A. at +55 (11) 3847-5610 (collect), Banco BTG Pactual S.A. – Cayman Branch at [email protected], +1 (212) 293-4600 (collect), Itaú BBA USA Securities, Inc. at +1 (212) 824 5083 (collect), or Santander US Capital Markets LLC at +1 (855) 404-3636 (toll free) or +1 (212) 940-1442 (collect). Questions or requests for assistance relating to the procedures for delivering Consents or additional copies of the Consent Solicitation Statement and any related documents may be directed to D.F. King & Co., Inc. at [email protected], +1 (800) 290-6427 (toll free) or +1 (212) 269-5550 (collect). The Consent Solicitation Statement and other related documents are available electronically at www.dfking.com/celse.

Forward-Looking Statements

The Company cautions you that statements included in this announcement that are not a description of historical facts are forward-looking statements that involve risks, uncertainties, assumptions and other factors which may not materialize or prove correct. These include, among others, statements with respect to the terms and timing for completion of the Solicitation and the Refinancing, the receipt of the Requisite Consents and the other consents required to effectuate the Refinancing, and the payment of the Consent Consideration. There can be no assurance that the transactions contemplated in this announcement will be consummated. The Company assumes no obligation to update any forward-looking statement included in this announcement to reflect events or circumstances arising after the date on which it was made.

The Solicitation Agents take no responsibility for the contents of this announcement. This announcement must be read in conjunction with the Consent Solicitation Statement. This announcement and the Consent Solicitation Statement contain important information which should be read carefully and in its entirety before any decision is made in connection with the Solicitation. If you are in any doubt as to the action you should take, you are recommended to seek your own financial advice immediately from your stockbroker, bank manager, accountant or other independent financial adviser.

None of the Company, CELSE, the Trustee, the Fiduciary Agent, the Policyholder Agent, the Solicitation Agents, the Information Agent or their respective affiliates, makes any recommendation as to whether or not Holders should deliver Consents. This announcement is for informational purposes only and is not a solicitation of Consents. The Solicitation is only being made pursuant to the Consent Solicitation Statement. The Company, subject to applicable law, reserves the right to waive or modify any term of, or to terminate, the Solicitation, for any reason, prior to the Expiration Time.

This announcement is neither an offer to sell nor a solicitation of an offer to buy any security. The Notes described herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), or any state securities laws, and they may not be offered or sold in the United States or to U.S. persons absent registration or an applicable exemption from the registration requirements of the Securities Act.

SOURCE Swiss Insured Brazil Power Finance S.à r.l.