Petrobras Puts off Domestic Bonds Sale on Weak Market

Brazil's state-led oil company, Petroleo Brasileiro SA, said on Thursday it has delayed plans to sell about 3 billion reais ($785.6 million) of local-market bonds because of adverse market conditions.

 

The decision, announced in a securities filing, came hours after Chief Executive Officer Aldemir Bendine told a congressional committee that Petrobras, as the company is commonly known, is not having trouble accessing capital markets.

 

Petrobras' debt of more than $130 billion is the largest of any oil company in the world, and the ability to pay it is being strained by falling oil prices.

 

Struggling with the fallout from a massive price-fixing, bribery and political-kickback scandal, the company recently lost its investment grade rating and has had little success with an asset sale program that Bendine considers essential to financing operations and paying obligations.

 

The decision cancels a planned book-building operation scheduled for Friday that would have determined which offers for the debt would be accepted and at what price.

 

Petrobras asked that Brazil's securities regulator, CVM, make a new review of its planned bond sale for a potential future offer.


($1 = 3.8189 Brazilian reais)

(Reporting by Jeb Blount; Editing by Matthew Lewis)