Petrobras Attracts High Demand and Raises 3.5 Billion Dollars With Global Bonds

Petrobras Sees Demand Higher Than Expected Amid Coronavirus Pandemic; Move May Open Door for Other National Companies

Amid the pandemic of the new coronavirus, Petrobras announced the pricing of a bond issuance abroad in the amount of US$ 3.25 billion, through its subsidiary Petrobras Global Finance (PGF). Petrobras Will Grant Access to Other Gas Producers to Its Processing Units

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The efforts demonstrated by Petrobras to adapt its operations to the impact of the new coronavirus and the drop in oil prices, as well as the adjustment made in its first-quarter balance sheet to account for expected losses, pleased the market overall.

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The issuance of US$ 3.25 billion in Petrobras bonds carried out yesterday (28) is expected to pave the way for other companies and banks in the country to seek funds in the international financial market.

The operation showed foreign interest in heavyweight names amid the need to allocate resources, while the interest rates of major economies remain at rock bottom.

Even with the strong impact of the virus in the US and Brazil at this moment, the demand for Petrobras bonds, which exceeded US$ 15 billion, was surprising.

The amount above US$ 10 billion had not been seen for a long time in the fundraising efforts by Brazilian issuers.

The bonds have a value of US$ 1.5 billion, maturing on January 3, 2031, with a coupon of 5.6% per annum (pa) and an issuance price of 99.993%, while the maturity on June 3, 2050 has a value of US$ 1.75 billion, a coupon of 6.75% pa, an issuance price of 98.110%, and a yield to the investor of 6.9% pa.

According to the state company, the subsidiary intends to use the funds for corporate purposes. The operation was led by BNP Paribas, Itau BBA, J.P. Morgan, Scotia Capital, and SMBC Nikko Securities Americas.