Petrobras Looks to Sell Rare Century Bond
Brazil's embattled state-run oil company Petrobras is looking to sell a rare 100-year bond on Monday, the company's first foray in the international debt capital markets since a wide-ranging corruption scandal.
The company, rated Ba2/BBB-/BBB-, has set initial price thoughts of 8.85% area for the US dollar-denominated SEC-registered bond issue, expected to price at a steep discount of around US$80 area later today.
Deutsche Bank and JP Morgan are the bookrunners.
"The idea is to make a bold statement," said a banker. "Doing a tenor that has only been done by a select group of issuers shows strength."
Mexico has been the only borrower in recent years out of Latin America that has attempted a 100-year issue. Chilean utility Endesa (ELE.MC) sold a Century bond in 1997, according to IFR data.
The deal is also the first dollar bond issue sold by Petrobras since March 2014, according to IFR data, when it priced a six-tranche US$8.5bn issue.
Spreads on Petrobras bonds widened slightly after the new issue announcement. The 7.25% 2044s, the company's longest dated notes, were bid 4bp-5bp wider at a spread of 445bp, according to a New York-based trader.
(By Davide Scigliuzzo and Paul Kilby and John Balassi)
