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Final Offering Circular Luxse

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Final Offering Circular Luxse OFFERING CIRCULAR U.S.$300,000,000 Banco do Brasil S.A. acting through its Grand Cayman branch 8.5% Subordinated Notes due 2014 Banco do Brasil S.A., a bank with limited liability organized as a sociedade anônima under the laws of the Federative Republic of Brazil (“Banco do Brasil” or the “Bank”), acting through its Grand Cayman branch (the “Grand Cayman Branch”), is issuing U.S.$300,000,000 aggregate principal amount of 8.5% Subordinated Notes due 2014 (the “Notes”). The Notes will mature on September 20, 2014, unless the maturity of the Notes is extended as a result of certain currency exchange or transfer restrictions being in effect on the maturity date, in which case the maturity of the Notes will be no later than March 20, 2016. The Notes will be subject to redemption only in the event of certain changes in Brazilian and other withholding taxes, subject to the prior approval of the Central Bank of Brazil (the “Central Bank”). In addition, if payment of interest or principal on the Notes would otherwise result in violation of capital adequacy ratios required of Brazilian banking institutions, payment of interest and principal will be suspended for the duration of that inadequacy. Interest on the Notes will accrue from and including September 20, 2004 and will be payable semi- annually in arrears on March 20 and September 20 of each year, commencing on March 20, 2005. See “Description of the Notes”. The Letter of Credit Custodian, on behalf of the Noteholders, will have the benefit of an irrevocable standby letter of credit (the “Letter of Credit”) provided by Credit Suisse First Boston, acting through its Cayman Islands branch (the “Letter of Credit Issuer”), to provide coverage (in an amount equal to three payments of scheduled interest on the Notes (plus an amount equal to 30 days of interest payable on three accrued payments of scheduled interest), and 18 months of fees (but not expenses) due and payable to the Trustee under the Indenture) in the event of the Bank’s inability to convert Brazilian Reais into U.S. Dollars or transfer U.S. Dollars outside Brazil (but, in each case, only to the extent that the equivalent in Reais of such funds plus an amount to cover risks associated with the uncertain date of conversion of such Reais into U.S. Dollars have been deposited into a bank account specified or owned by the Letter of Credit Issuer), due to certain actions or measures taken or approved, or the failure to take or approve actions or measures by the Brazilian government which occur after the Issue Date. See “The Letter of Credit”. The Notes will be unsecured, subordinated obligations of the Bank. Payment of principal of the Notes may be accelerated only in the case of certain events involving the Bank’s bankruptcy, liquidation or dissolution or similar events, and the Bank will be required to make payment after acceleration only after the Bank has been declared bankrupt, put into liquidation or otherwise dissolved for purposes of Brazilian law. There will be no right of acceleration in the case of a default in the performance of any of the Bank’s covenants, including the payment of principal or interest in respect of the Notes. Application has been made to list the Notes on the Luxembourg Stock Exchange. Investing in the Notes involves risks. See “Risk Factors” beginning on page 13. It is a condition of the issuance of the Notes that they be rated at least “Baa1” by Moody’s Investors Service, Inc. (“Moody’s”). Price: 99.174% plus accrued interest, if any, from and including September 20, 2004 Delivery of the Notes in book-entry form only through The Depository Trust Company (“DTC”), including for the account of Euroclear Bank S.A./N.V., as operator of the Euroclear System (“Euroclear”), and Clearstream Banking, société anonyme (“Clearstream, Luxembourg”), will be made on or about September 20, 2004 (the “Closing Date”). The Notes have not been registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”). The Notes may not be offered or sold within the United States or to U.S. persons, except to qualified institutional buyers in reliance on the exemption from registration provided by Rule 144A under the Securities Act (“Rule 144A”) and to certain non U.S. persons in offshore transactions in reliance on Regulation S under the Securities Act (“Regulation S”). Prospective investors are hereby notified that sellers of the Notes may be relying on the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A. Credit Suisse First Boston BB Securities Ltd. The date of this Offering Circular is November 10, 2004. TABLE OF CONTENTS Page Page FORWARD-LOOKING STATEMENTS .......................... 1 MANAGEMENT AND EMPLOYEES ..............................124 SUMMARY ................................................................ 2 OWNERSHIP OF BANCO DO BRASIL ...........................129 RISK FACTORS.......................................................... 13 THE BRAZILIAN FINANCIAL SYSTEM ........................131 PRESENTATION OF FINANCIAL INFORMATION AND DESCRIPTION OF THE NOTES .....................................148 SUMMARY FINANCIAL INFORMATION................. 29 FORM, DENOMINATION AND TRANSFER....................165 BANCO DO BRASIL S.A. CONSOLIDATED FINANCIAL THE LETTER OF CREDIT ............................................170 INFORMATION AS OF AND FOR THE SIX- MONTH PERIODS ENDED JUNE 30, 2004 TAXATION.................................................................176 AND 2003............................................................ 31 UNITED STATES ERISA AND CERTAIN OTHER BANCO DO BRASIL S.A. CONSOLIDATED FINANCIAL CONSIDERATIONS ................................................182 INFORMATION AS OF AND FOR THE YEARS PLAN OF DISTRIBUTION ............................................184 ENDED DECEMBER 31, 2003, 2002 AND 2001..... 33 TRANSFER RESTRICTIONS .........................................187 BANCO DO BRASIL S.A. CONSOLIDATED CAPITALIZATION ................................................ 36 SUMMARY OF CERTAIN DIFFERENCES BETWEEN ACCOUNTING PRACTICES ADOPTED IN BRAZIL EXCHANGE CONTROLS AND FOREIGN EXCHANGE AND U.S. GAAP .................................................190 RATES................................................................. 37 AVAILABLE INFORMATION........................................203 USE OF PROCEEDS .................................................... 39 LEGAL MATTERS ......................................................204 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF ENFORCEABILITY OF CIVIL LIABILITIES ....................204 OPERATIONS ....................................................... 40 INDEPENDENT ACCOUNTANTS ..................................205 RECENT DEVELOPMENTS AND ANALYSIS................. 78 GENERAL INFORMATION ...........................................206 BUSINESS OF BANCO DO BRASIL S.A. ...................... 82 INDEX TO FINANCIAL STATEMENTS ..........................F-1 SUBSIDIARIES ........................................................... 123 Prospective investors should rely only on the information contained in this document or to which the Bank has referred them. The Bank has not authorized anyone to provide prospective investors of the Notes with information that is different. This document may only be used where it is legal to sell the Notes. The information in this document may only be accurate on the date of this document. -i- This Offering Circular has been prepared by the Bank solely for use in connection with the proposed placement of the Notes. The Bank, and Credit Suisse First Boston LLC and BB Securities Ltd. (the “Initial Purchasers”), reserve the right to reject any offer to purchase, in whole or in part, for any reason, or to sell less than all of the Notes offered hereby. This Offering Circular is personal to the prospective investor to whom it has been delivered by the Initial Purchasers and does not constitute an offer to any other person or to the public in general to subscribe for or otherwise acquire the Notes. Except as set forth in the paragraph below, distribution of this Offering Circular to any person other than the prospective investor and those persons, if any, retained to advise that prospective investor with respect thereto is unauthorized, and any disclosure of its contents without the Bank’s prior written consent is prohibited. This Offering Circular is intended solely for the purpose of soliciting indications of interest in the Notes from qualified investors and does not purport to summarize all of the terms, conditions, covenants and other provisions contained in the Indenture, the Letter of Credit and other transaction documents described herein. The information provided is not all-inclusive. The market information in this Offering Circular has been obtained by the Bank from publicly available sources deemed by the Bank to be reliable. Notwithstanding any investigation that the Initial Purchasers may have conducted with respect to the information contained herein, the Initial Purchasers do not accept any liability in relation to the information contained in this Offering Circular or its distribution or with regard to any other information supplied by or on the Bank’s behalf. The Letter of Credit Issuer does not make any representation as to the accuracy or completeness of the information set forth herein other than the limited financial information concerning it set forth under “The Letter of Credit”. The Bank confirms that, after having
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