On July 24, 2007, the Company concluded its Registration Statement for the Initial Public Offering of Debentures, with the issuance of 25,000,000 nominative registered debentures that are nonconvertible into shares, unsecured, in a single series, at the nominal value of R$ 10,000.00 (ten thousand reais) each, fully subscribed by investment fund Bradesco BBI. The operation will mature in 7 (seven) years and the securities will bear interest at the CDI rate plus 0.9% pr annum. Amortization will be in 4 (four) annual installments payable from the 48th (forty-eighth) month after the date of issuance, beginning July 1, 2011.
Under the 2nd Issue of Convertible Debentures with real and floating guarantees, 27,600 (twenty seven thousand, six hundred) debentures were issued in denomination of R$ 10,000.00 (ten thousand reais), with date of issue on 15 April 2009, with the following conditions:
i. the company will issue for private placement debentures in an amount up to R$276,000,000.00 (two hundred and seventy-six million Brazilian real);
ii. the debentures will be convertible into shares issued by the Company by dividing the nominal unit value per debenture by the price of R$8.50;
iii. the debentures will mature in 42 months as of their issue date;
iv. remuneration will be equivalent to the variation in the CDI (interbank overnight deposit) rate plus 2.00% per annum, with payments made semiannually;
v. two years after the issue date of the Debentures, the Company will have the right to request the conversion of up to 50% of the Debentures in circulation if the average price per share of the Company’s common stock in the previous 60 trading sessions is equal to or greater than 140% of the Conversion Price;
vi. the debentures will be secured by a pledge constituted on 100% of the common stock issued by CHL Desenvolvimento Imobiliário S.A. and by a general privilege on the Company’s assets, in accordance with Article 58, Paragraph 1 of Federal Law 6,404/76.
In October 21th, 2009, we announced our intention to redeem all the Second Issue of Debentures in circulation, in advance of their maturity on November 30th, 2009.
- 3rd issuance of non-convertible debentures with secured collateral
On August 31, 2009, our shareholders approved a third issuance of non-convertible, with secured collateral, single series debentures, in which we issued 300 book-entry and registered debentures, each with a face value of R$1.0 million, for a total amount of R$300.0 million. The debentures will mature in five years as from the issuance date.The total principal amount is due to be paid in 36 monthly installments and after such period the payment shall be made twice a year. The interest is paid twice a year.
The proceeding from such debentures will be allocated to the financing of the construction of residential units classified within the scope of the legislation related to the SFH.
Our repayment obligations under these debentures are secured by the collateral of credit rights of special purpose vehicles engaged in the development of real estate projects funded with the proceedings arising from this third issuance of debentures, as well as the collateral of the shares issued by such special
purpose vehicles.
The indenture contains provisions limiting our ability to incur indebtedness beyond certain thresholds, and restricting our debt to EBITDA ratio, based on our consolidated financial statements.
In May 2008, Standard & Poors upgraded the corporate credit rating of our debentures from brBBB to brBBB+.