Analysis: par for par, so the price is in the coupon

The exchange consideration adds to exactly US$1,000 per US$1,000 tendered, US$253.85 of it in cash. Nothing in the headline consideration compensates a holder for giving up a 2028 maturity, because there is no premium: the whole payment for the extension sits in the coupon, which moves from 6.750% to 11.000% on the portion that rolls into 2030. That is a large step up, and on the reduced principal it is a real increase in the issuer’s annual interest bill on this instrument rather than an accounting artefact. CSN bought two years of maturity and paid for them in cash interest.

The consent solicitation is the second half of the structure and it is the part that explains the 77.49% outcome. Tendering holders had to consent to amendments to the 2028 indenture, and consents could not be given without tendering, which is the standard mechanism for stripping protective covenants from the notes that stay behind. A holder weighing whether to sit out faced not just an untendered stub in a smaller, less liquid issue but an amended indenture written by the consenting majority. The 70% minimum was cleared with room to spare, and the disclosure does not say how much of the untendered balance is held by investors who declined and how much simply did not respond.

What the transaction does not do is reduce leverage. Cash consideration of US$255,709,197.40 leaves the group, the issuer receives no proceeds, and the residual 2028 stub stays outstanding. Net debt was R$42,138.2 million and leverage 3.49x before settlement, and this exchange changes the timing of the obligation rather than its size. CSN said as much when it framed the offer as easing the amortization schedule and gaining time to execute its strategic projects. The company also said it is already using its cash to pay down gross debt, and it held R$15.4 billion in cash at the end of June 2026, so funding the US$255.7 million cash leg is not in question.

The more consequential item for the capital structure sits in the other filing. The binding proposals received for CSN Cimentos on 10 August 2026 point to a possible asset sale, and asset sales, not exchanges, are what move a 3.49x leverage ratio. The exchange offer and the April bridge loan of US$1.2 billion buy the time in which that process can run.

Three things are checkable from here. The first is the size and terms of the residual 2028 stub once the supplemental indenture is executed. The second is CSN’s quarterly interest expense, where the coupon step up on the US$698,330,000 of new principal should be visible. The third is the outcome of the cement process, which the company has committed to disclose as material developments occur.

What the documents say

Holders of US$1,007,324,000 of the 6.750% senior notes due 2028 issued by CSN Inova Ventures agreed to swap them for longer dated paper and cash, a take up of 77.49% of the outstanding balance. Companhia Siderurgica Nacional (NYSE: SID), the Brazilian steelmaker that guarantees the notes, reported the final results in a press release and a material fact filed on 11 August 2026. The issuer is a wholly owned Cayman Islands subsidiary, formerly CSN Islands XI Corp.

What holders received

The exchange offer expired at 5:00 p.m. New York City time on 10 August 2026. For each US$1,000 principal amount of 2028 notes validly tendered and accepted, eligible holders receive US$253.85 in cash and US$746.15 in principal amount of new 11.000% senior notes due 2030, plus accrued and unpaid interest to but excluding the settlement date. Interest on the exchanged notes ceased to accrue on that date. Settlement was expected on 12 August 2026, the second business day after expiry.

Against an outstanding principal amount of US$1,300,000,000, the issuer expected to issue US$698,330,000 of new notes and pay US$255,709,197.40 in cash consideration, excluding accrued interest and payments in lieu of fractional new notes. It said it would receive no cash proceeds from the transaction. The new notes carry the same full, unconditional and irrevocable guarantee from the parent that the 2028 notes carried.

The minimum participation condition was US$910,000,000.00, or 70% of the outstanding balance, and the tendered amount cleared it. Tendering holders were also required to deliver consents to proposed amendments to the indenture governing the 2028 notes, and could not deliver consents without tendering. The issuer said it received the requisite consents to execute the supplemental indenture giving effect to those amendments.

The offer was made only to qualified institutional buyers in the United States under Rule 144A and to holders outside the United States who are not U.S. persons under Regulation S, on the terms of an exchange offering memorandum dated 30 July 2026. Banco Bradesco BBI, BNP Paribas Securities, Citigroup Global Markets, Credit Agricole Securities (USA), HSBC Securities (USA), Morgan Stanley, UBS Investment Bank and XP Investimentos acted as dealer managers, with D.F. King as information and exchange agent. The material fact was disclosed under article 157, paragraph 4 of Law No. 6,404/1976 and CVM Resolution No. 44/2021 and signed by chief financial and investor relations officer Antonio Marco Campos Rabello.

The balance sheet behind the offer

CSN’s second quarter results, published on 13 August 2026, put consolidated net debt at R$42,138.2 million as of 30 June 2026 and leverage, measured as net debt to last twelve months EBITDA, at 3.49x. That was 14 basis points above the previous quarter, which the company attributed to the amortization of prepayment contracts, foreign exchange movement on foreign currency debt, and an advance for future capital increase of R$495 million made to Transnordestina. Cash and cash equivalents ended the quarter at R$15.4 billion. Net revenue in the quarter was R$11,306.2 million, up 5.7% on the same period of 2025.

In the same document CSN set out the wider liability management sequence. It signed a bridge loan with a banking syndicate in mid April for US$1.2 billion, and it described the July exchange offer as aimed at extending by two years the maturity of the US$1.3 billion originally due in 2028. The company used exchange rates of R$5.46 per dollar on 30 June 2025, R$5.22 on 31 March 2026 and R$5.18 on 30 June 2026. The central bank’s PTAX series puts the rate at 5.1766 on 30 June 2026.

Separately, and on the day before the offer expired, CSN told the market it had received binding proposals from purchasers authorised to participate in the competitive process for the potential full divestment of its cement subsidiary, CSN Cimentos S.A., a process first disclosed on 15 January 2026.