Petrobras completes $4 bi Bond sale

Petrobras completed the sale of US$4 billion of bonds on the international capital markets. US$2 billion of these bonds will mature in five years, while the other US$2 billion will mature in 10 years.

Market demand was approximately US$19 billion (around five times the amount on offer), representing orders placed by 592 investors in the United States, Europe, Asia and Latin America.

The securities maturing in 2022 were sold for an annual interest rate of 6.125%, while those maturing in 2027 had a cost of 7.375% per year, significantly lower than the figures seen in May 2016 (8.625% per year for five years and 9% per year for 10 years). These operations were priced with the lowest levels of premiums for the company’s traded securities seen in recent large bond sales. (Premiums are fees paid to investors in relation to bonds sold in the secondary market.)

According to Petrobras’ finance and investor relations director, Ivan Monteiro, the operation’s success reflects the market’s recognition of the liability management strategy that the company began last year: “It also recognizes the results already generated by our policy for partnerships and disposals, and our operational performance.”

Petrobras plans to use the funds raised to buy back securities set to mature between 2019 and 2020. In this way, the company will extend the payment timeframe for part of its debts.

Based on similar transactions carried out in May and July 2016, last week Latin Finance magazine declared Petrobras to have been the top-performing company in 2016 in terms of liability management operations in the international capital markets. For the first time, the company received a Corporate Liability Management of the Year Award at a ceremony held in New York on Thursday (January 12).