**Exhibit 4.20**

#  

# ANNOUNCEMENTOF COMMENCEMENT OF PUBLIC DISTRIBUTION OF THE

# SECONDISSUE OF DEBENTURES BY

 

 

**Listed company**

**CNPJ/MF n° 06.981.180/0001-16**

**Avenida Barbacena 1200, A1 Wing, 17th Floor,**

30190-131 Belo Horizonte, Minas Gerais, Brazil.

 

**ISIN:****no BRCMGDDBS017**

 

**BB BANCO DE INVESTIMENTO S.A.** (“the Lead Manager”), hereby announces thedistribution on today’s date of 40,000 (forty thousand) non-convertibledebentures of the Second Issue by **CEMIGDISTRIBUIÇÃO S.A.** (“**theOffering**”, “**the Issue**”and “**the Company**”), beingunsecured, nominal, book-entry Debentures (“the Debentures”), in asingle series, with nominal unit value of R$10,000.00 (ten thousand Reais),comprising a total, on the Issue Date, namely December 15, 2007 (“**the Issue Date**”), of:

 

R$ 400,000,000.00

 

**Rating:  Fitch :A+(bra)**

 

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**1.**             DECISION AND DEED OFTHE ISSUE

** **

1.1.          **Corporate decisions:** The Offer was approvedat the meeting of the Board of Directors of the Issuer held on August 30,2007, the minutes of which were ratified by the meeting of the Board ofDirectors of the Issuer held on October 30, 2006. The meeting of the Boardof Directors of the Issuer held on December 13, 2007, decided the finalinterest rate for Remuneratory Interest (as defined below).

 

1.2           **Issue Deed and Amendment to the Deed**: Theterms and conditions of the Debentures are contained in the Private Deed of theSecond Public Issue of Non-Convertible Debentures, in a Single Series,unsecured, of Cemig DistribuiçãoS.A. (“**theDeed**”) and the First Amendment to the Private Deed of theSecond Public Issue of Non-Convertible Debentures, in a Single Series,unsecured, of Cemig DistribuiçãoS.A.  (“**the Amendment to the Deed**”),signed, respectively on November 12, 2007 and December 13,2007 between the Issuer and SLWCorretora de Valores e Câmbio Ltda. (“**theFiduciary Agent**”), and the Deed was filed with the Commercial Boardof the State of Minas Gerais  underno. ED000043-4/000 on November 21, 2007 and the Amendment to the Deed wassubmitted for registration under no. 07/459.087-1, on December 13, 2007.

 

**2.**             CHARACTERISTICS OFTHE DEBENTURES

** **

2.1.          Issue Date: December 15th,2007 (“the Issue Date”).

 

2.2           Nominal unit value:R$ 10,000.00 (ten thousand Reais), on the Issue Date (“the Nominal UnitValue”).

 

2.3           Number of Debentures:40,000 (forty thousand) Debentures will be issued, so that the total value ofthe Issue is R$ 400,000,000.00 (four hundred million Reais).

 

2.4           Increase in theQuantity of Debentures: There will be no possibility of increase in theQuantity of Debentures to be distributed under this Offering as a result ofexcess of demand, neither at the option of the Issuer (under the terms of Article 14of CVM Instruction 400), nor at the option of the Lead Manager (under the termsof Article 24 of CVM Instruction 400).

 

2.5           Number of Series: The Offering will be made in asingle series.

 

2.6           Period and Date ofMaturity: The period of maturity of the Debentures of this Issue is 120(one hundred and twenty) months from the Issue Date, with final maturity on December 15,2017 (“the Maturity Date”). On the Maturity Date, the Issuer undertakesto pay such Debentures as are still in circulation, for their Nominal UnitValue, plus the due Remuneration (as defined below).

 

2.7           Form and Type:The Debentures will be issued in Nominal form and will be of the book-entrytype, without issue of deposits or certificates.

 

2.8           Convertibility:The Debentures will not be convertible into shares.

 

2.9           Unsecured: TheDebentures will be of the unsecured type.

 

2.10         Registry forDistribution and Trading: The Debentures shall have registry: (a) forplacement on the primary market through the Securities Distribution System(SDT)*,*administeredby the Custody and Settlement Chamber (“Cetip”), based on the policiesand directives set by the Brazilian Association of Financial MarketInstitutions (“Andima”), and the Debentures will be paid up, settled andheld in custody at Cetip; and (b) for trading, in the secondary market, (i) throughthe National Debentures System (SND), administered by Cetip, based on the policiesand directives set by Andima, the Debentures being settled and held in custodyat Cetip; and/or (ii) through the Bovespafix system, with the Debenturesbeing settled and held in custody at the CBLC (Brazilian Settlement and CustodyCompany).

 

2.11         Collection ofinvestment intentions: The procedure of Bookbuilding was adopted, organizedby the Lead Manager, through collection of investment intentions, in the termsof Paragraphs 1 and 2 of Article 23 and Article 44 of CVMInstruction 400, without receipt of anticipated reservations, nor minimumnor maximum lots (“the Bookbuilding Procedure”). The BookbuildingProcedure was effected **withthe objective of determining the final rate used for the purpose of calculationof the Remuneration Interest (as defined below), of the Debentures, resultingin the rate of 7.96% (seven point nine six per cent), which was the rate**

 

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**equivalent to the lowest of the ratesoffered by the institutions participating in the process for lots of Debenturesthe sum of which is equal to or greater than the total number of the Debenturesoffered.**

 

2.12         Placement period:The period of placement of the Debentures shall be up to 5 (five) businessdays, from the date of publication of this announcement of opening ofdistribution of the Debentures (“the Placement Period”, and “theOpening Announcement”). After the full placement of the Debentures therespective announcement of closing of the distribution of the Debentures (“theClosing Announcement”) will be published.

 

2.13         Distribution Procedure: The Debentures shall be the subjectof a public distribution, under the firm guarantee distribution regime, withintermediation by a financial institution that is part of the system ofdistribution of securities, through the SDT, administered by Cetip, based onthe policies and directives fixed by Andima, using the procedure specified inparagraph 3 of Article 33 on CVM Instruction 400, and according tothe distribution plan prepared by the Lead Manager, which shall take intoconsideration its relationships with clients and other aspects of a commercialnature, and also the strategies of the Lead Manager and the Issuer, subject tothe terms and conditions defined in the *Contract for Management,Placement and Distribution of Non-Convertible Debentures under the FirmGuarantee Regime, for the Second Public Issue by CEMIG Distribuição S.A*(“the Distribution Contract”), and the Offering shall be carried out inaccordance with the result of the BookbuildingProcedure.

 

2.14         Subscription price andform of paying up: All the debentures shall be subscribed in the primarymarket for their Nominal Unit Value, plus the Remuneration, calculated *pro rata temporis*, from the Issue Date upto the date of their actual paying up, which shall be at sight, in Braziliancurrency, simultaneously with the subscription period.

 

2.15         Amortization of theprincipal: The Nominal Unit Value of the Debentures shall be amortized in 3(three) equal, annual and consecutive installments, the first becoming due on December 15,2015 (each one of these dates being an “Amortization Date”).

 

2.16         Remuneration: TheDebentures will be remunerated in accordance with the following: (a) MonetaryUpdating: the Nominal Unit Value of the Debentures shall be updated, from theIssue Date or from the date of expiry of the most recent Capitalization Period,as the case may be, up to the date of their actual payment, by the IPCA(Amplified National Consumer Price) Index, calculated and published by the IBGE(Brazilian Geography and Statistics Institute) (the “Updating”). TheUpdating of the Debentures shall be calculated *pro ratatemporis*, by business days, according to the formula specified inClause 4.1.9.1 of the Deed and shall be paid proportionately by the Issuerjointly with the Nominal Unit Value of the Debentures, on the same AmortizationDates of the Debentures, the first taking place on December 15, 2015 andthe last on the Maturity Date; and (b) Remuneration Interest: TheDebentures shall have Remuneration Interest calculated at the rate of 7.96%(seven point nine six per cent) per year, as defined by a BookbuildingProcedure (“the Remuneration Interest” and, jointly with the Updating, “theRemuneration”), calculated exponentially and cumulatively *pro rata temporis* by business days expired, based on ayear of 252 business days, applicable to the Nominal Unit Value of theDebentures plus the Updating, from the Issue Date, or on the balance of theNominal Unit Value, from the Date of Maturity of the last capitalization periodas the case may be, up to the date of its actual payment. The RemuneratoryInterest shall be calculated in accordance with the formula contained in Clause4.1.9.2 of the Deed and shall be paid annually, starting from the Issue Date,on December 15 of each year, the first payment taking place on December 15,2008, and the last on the Maturity Date. For the purposes of setting the priceof distribution of the Debentures, in the Bookbuilding Process investmentintentions from persons linked to the Offering were not accepted – defined asthose referred to by Clause 55 of CVM Instruction 400, with the exception ofthe intermediaries contracted with firm guarantee clause for subscription ofthe Debentures.

 

2.17         Renegotiation:There will be no programmed renegotiation of the Debentures.

 

2.18         Extraordinaryamortization: There will be no possibility of the Issuer amortizing thenon-amortized Nominal Unit Value of the Debentures on any date other than theAmortization Dates.

 

2.19         Optional earlyredemption: The Debentures of this Issue will not be subject to optionalearly redemption by the Issuer.

 

**2.20****       ****Earlymaturity:**

 

Subject to items 2.20.1,2.20.1.1 and 2.20.2 below, the fiduciary agent shall declare all theobligations relating to the Debenture to become due for payment immediately anddemand immediate repayment by the Issuer of the debtor balance of the nominalunit value of the Debentures, plus the Remuneration, due up to the date ofactual payment, calculated *pro rata temporis* from the Issue Date or from the start ofthe respective Capitalization Period, and other charges, independentlyof advice, contestation or notification within or

 

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outside the Courts, inany of the following events: (each event being referred to as a “DefaultEvent”):

 

(a)   declarationof bankruptcy, dissolution and/or liquidation of the Issuer or application forJudicial Recovery or out-of-Court reorganization of the Issuer of anapplication for bankruptcy made by the Issuer, or any analogous event thatcharacterizes a state of insolvency of the Issuer, in accordance with theapplicable legislation;

 

(b)   non-complianceby the Issuer with any pecuniary obligation related to the Debentures;

 

(c)   earlymaturity of any debt of the Issue in an amount of R$50,000,000.00 (fiftymillion Reais) or more, or its equivalent in other currencies, due to anynon-compliance, contractual or otherwise;

 

(d)   termination,for any reason, of any of the concession contracts to which the Issuer is aparty representing separately or jointly an amount equal to 30% (thirty percent) or more of the net operational revenue of the Issuer as stated in itslast prior financial statements;

 

(e)   legitimateprotest of securities against the Issuer, in an amount exceedingR$50,000,000.00 (fifty million Reais) or its equivalent in other currencies,unless made in error or bad faith of a third party validly proven by theIssuer, as the case may be, or unless suspended or cancelled, or unless aguarantee for the security(ies) be given in Court, under any circumstances,within a maximum of 30 (thirty) calendar days from the date on which thewritten notice sent by the Fiduciary Agent is received;

 

(f)    non-complianceby the Issuer or by Cemig with any non-pecuniary obligations specified in theIssue Deed, not cured in 30 (thirty) calendar days from the date of the writtennotice sent by the Fiduciary Agent to the issuer to this effect;

 

(g)   ifthe Issuer omits to pay by the maturity date, or does not take the legal orjudicial measures required for non-payment in relation to, any debt or anyother obligation payable by the Issuer under any agreement or contract to whichit is a party as a lender, borrower, or guarantor, involving an amount ofR$50,000,000.00 (fifty million Reais) or more or its equivalent in othercurrencies; and/or

 

(h)   privatization,merger, liquidation, dissolution, extinction, split and/or any form ofstockholding reorganization which results in reduction of the registeredcapital of the Issuer, for the purposes of this sub-clause “privatization”being understood as an event in which (i) the present direct controllingstockholder of the Issuer, Companhia Energética de Minas Gerais – Cemig (“Cemig”),ceases directly or indirectly to hold the equivalent of at least 50% (fifty percent) plus one of the total shares representing the voting stock of the Issuer;and/or (ii) the present controlling stockholder of Cemig, the governmentof the State of Minas Gerais, ceases directly or indirectly to hold theequivalent of at least 50% (fifty per cent) plus one of the total of the sharesrepresenting the voting capital of Cemig.

 

2.20.1The occurrence of any Default Event indicated in sub-items (a), (b) e (c) aboveshall result in automatic early maturity of the Debentures, independently ofany Court or out-of-court notice, or any consultation of the Debenture holders.

 

2.20.1.1If any of the other Default Events (other than those specified in item 2.20.1above) take place, the Fiduciary Agent shall call, within 48 (forty eight)hours of the date on which it becomes aware of such event, a General Meeting ofDebenture Holders to decide on declaration of early maturity of the Debentures,subject to the procedure for convocation specified in Clause VIII of the IssueDeed and the specific quorum established in item 2.20.2 below.

 

2.20.2After the General Meeting of Debenture Holders mentioned in item 2.20.1.1 abovehas been held, the Fiduciary Agent shall declare early maturity of all theobligations arising from the Debentures and demand immediate payment by theIssuer of the Nominal Unit value of the Debentures, plus the Remuneration andcharges up to the date of actual payment, in accordance with item 2.20 above,unless Debenture Holders representing at least 2/3 (two-thirds) of theDebentures in circulation (as defined in the Deed) opt not to declare earlymaturity of the obligations arising from the Debentures.

 

2.20.2.1If the Debenture Holders of the present Issue opt not to declare early maturityof the obligations arising from the Debentures, under item 2.20.2 above, theDebentures held by the Debenture Holders who do not agree with that decisionshall be redeemed by the Issuer within a maximum of 30 (thirty) calendar daysfrom the date of the holding of the General Meeting of Debenture Holders. The

 

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Debenturesshall be redeemed for their nominal unit value plus the remuneration owed,calculated *pro rata temporis*from the Issue Date or the date of the startof the respective Capitalization Period, up to the date of actual redemption.

 

2.20.3If the General Meeting of Debenture Holders does not take place as specified initem 2.20.2. above, or if: (a) it is not called; (b) there is nodecision on the date originally established for its being held; or (c) thereis no quorum, where any of these events arises from an act or event notimputable to the Fiduciary Agent, the Fiduciary Agent shall declare earlymaturity of all the obligations arising from the Debentures, and the provisionsof item 2.20.4 below shall apply.

 

2.20.4In the event of early maturity of the Debentures, the Issuer undertakes to redeemthe totality of the Debentures in circulation (as defined in the Deed) withtheir consequent cancellation, by payment of the balance of the Nominal UnitValue of the Debentures in circulation (as defined in the Deed), plus theRemuneration, calculated *pro rata temporis*from the Issue Date or from the date of the start of the respectiveCapitalization Period, up to the date of its actual payment, plus any otheramounts owed by the Issuer under the Deed, including the charges for arrearstherein established.

 

2.21         Target Investor Publicfor the Offering: The Target Public of the Offering is made up ofinstitutional or qualified investors, as defined in Article 109 of CVMInstruction 409, of August 18, 2004, as amended, but debentures may beplaced with other non-qualified investors, investment funds, privateindividuals or legal entities, whether or not clients of the institutions thatadhere to the distribution contract, if they are aware of the terms, conditionsand risks inherent to the Debentures, and also have access to the prospectusesrelating to the Offering.

 

2.22         **Inappropriatenessof investment in the Debentures**:

 

The Debentures that are the subject of the presentOffer are not appropriate for investors who need considerable liquidity inrelation to the securities acquired, since trading of Debentures in theBrazilian secondary market is restricted.

 

Investors should read the *Risk Factors*section of the Final Prospectus, which is available to investors as stated initem 6 below.

 

2.23         Use of Proceeds:The funds obtained from the Offering will be used, in their entirety, to paythe remaining debtor balance of the promissory notes issued under the ThirdPublic Issue of Promissory Notes of Cemig Distribuição S.A., subject to theprovisions of Clause 3.5 of the Deed.

 

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**3****.****            ****THE LEAD MANAGER**

 

**BB Banco de Investimento****S.A.**Rua Senador Dantas105, 36th Floor - Centro, Rio de Janeiro, Rio de Janeiro StateAtt: Mr. Alexandre Wanzeller CasaliTelephone: (21) 3808-2742 - Fax: (21) 3808-3239E-mail: acasali@bb.com.br

 

**4.**             **MANDATED BANK**

 

**Banco Bradesco S.A.**Cidade de Deus –Prédio Amarelo – 2nd Floor - Osasco, SP - CEP: 06029-900Att.: Mr. José Donizetti deOliveiraTelephone: (11) 3684-3749 - Fax: (11) 3684-2714E-mail:4010.donizetti@bradesco.com.br

 

**5.****            ****FIDUCIARY AGENT**

 

**SLW Corretora de Valores e Câmbio Ltda.**Rua Dr. RenatoPaes de Barros 717, 6th to 10th Floors Itaim Bibi, São Paulo, SãoPaulo State - CEP: 04530-001Att.: Mr. Felipe Coimbra Aloi AndréTelephone: (11) 3048-9763 / 3048-9915 - Fax: (11) 3048-9888E-mail:slw@slw.com.br

 

**6.****             ADDITIONALINFORMATION**

 

For additionalinformation on the Offering and the Debentures, and also to consult theDefinitive Prospectus, interested parties should contact the CVM, the Issuer,Cetip, or the head office of the Lead Manager, at the addresses given in thisannouncement.

 

**CEMIG Distribuição S.A.**Av.Barbacena 1200, 17th Floor, A1 Wing Belo Horizonte, Minas GeraisState - CEP: 30190-131Att.: Sr. Paulo Eduardo Pereira GuimarãesTelephone: (31)3506-4105 - Fax: (31) 3506-5068E-mail: peduardo@cemig.com.brWeb:http://cemigd.infoinvest.com.br

 

**CETIP– Câmara de Custódia e Liquidação**Rua Líbero Badaró425, 24th Floor - São Paulo, São Paulo State Telephone: (11)3111-1596 - Fax: (11) 3115-1564 Email:  gr.debentures@cetip.com.brWeb: www.cetip.com.br

 

**CVM –Rio de Janeiro – RJ**Rua Sete deSetembro 111, 5th Floor - Rio de Janeiro, Rio de Janeiro StateWeb: www.cvm.gov.br

 

**CVM –São Paulo – SP**Rua CincinatoBraga 340 – 2nd-4th Floors - Edifício Delta Plaza - SãoPaulo, São Paulo StateWeb: www.cvm.gov.br

 

*The Prospectus of the Offering is available toinvestors at the CVM for consultation and reproduction only*

 

**7.****             DATE OF COMMENCEMENTOF THE OFFERING**

 

The Commencement Date ofthe Offering is December 19, 2007.

 

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**8.****             REGISTRY OF THE OFFERWITH THE CVM**

 

**The offering was registered withthe Brazilian Securities Commission (CVM) on December 17, 2007, undernumber CVM/SRE/DEB/2007/048.**

 

**Registry of this distribution does not imply anyguarantee by the CVM of the truthfulness of the information given nor anyjudgment on the quality of the issuer, nor on the debentures to be distributed.**

** **
|  | ***The present Public Offer or program was prepared in  accordance with the terms of the Self-Regulation Code of Anbid for Public  Offers for distribution and acquisition of securities, which has been  registered at the 4th Registry Office for Securities and Documents of the  district of São Paulo, São Paulo State, under No. 4890254, and the  present Public Offer/program thus complies with the minimum standards of  information contained in the Code, and Anbid has no responsibility for the  said information, for the quality of the Issuer and/or the Offering  party/ies, nor of the participating institutions nor the securities that are  the subject of the present Public Offer/program.*** |
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**THE LEADMANAGER**

 

 

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