JBS new bond sale plans to end bid for US unit IPO

* JBS in advanced talks with BNDES for $2.36 bln bond

* New bond issuance ends obligation for U.S. unit IPO

RIO DE JANEIRO, Dec 27 (BestGrowthStock) – Brazilian food giant JBS
(JBSS3.SA: ), the world’s largest beef producer, is in “advanced
stages” to sell 4 billion reais ($2.36 billion) of bonds to
state development bank BNDES, eliminating an obligation for an
initial public offering of its U.S. unit next year.

The new bond will replace 3.48 billion reais of debt issued
in 2009 by JBS that was mostly bought by BNDESpar, the
development bank’s holding company, JBS said in a securities
filing on Sunday.

The 2009 bonds were sold to fund the takeovers of
U.S.-based Pilgrim’s Pride and Brazilian rival Bertin and were
convertible into JBS USA stock. Under terms of the agreement
with BNDES, JBS initially agreed to sell shares in an IPO for
its U.S. unit in 2010 or pay a fine equal to 15 percent of the
debt, postponing the IPO to 2011.

The transaction is unrelated to talks between JBS and Sara
Lee Corp (SLE.N: ) for a takeover of the U.S. food company. The
talks haven’t succeeded because of price and other terms, a
source told Reuters last week. [ID:nN19146410]

“Among the advantages of the new issuance, we would
highlight the elimination of an obligation to go ahead with an
initial public offering of JBS USA in 2011 and the optimization
of the company’s fiscal and financial structure,” JBS said in
the filing.

The five-year bonds will yield 8.5 percent a year and are
convertible into JBS shares in the fifth year, the company

JBS also said it paid 521.9 million reais to holders of its
2009 bond, equivalent to the fee it had agreed for not holding
the JBS USA IPO in 2010.
($1=1.688 reais)
(Reporting by Elzio Barreto; Editing by Derek Caney)

JBS new bond sale plans to end bid for US unit IPO