Petrobras sees higher-than-expected demand amid the coronavirus pandemic; movement can open the door to other national companies

In the midst of the new coronavirus pandemic, Petrobras announced the pricing of a bond issue abroad worth US$3,25 billion, through its subsidiary Petrobras Global Finance (PGF). Petrobras will give access to other gas producers to its processing units

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The efforts shown 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 to its first quarter balance sheet to account for expected losses, pleased the market in general.

The issuance of US$3,25 billion in Petrobras bonds carried out yesterday (28) should open the way for other companies and banks in the country to seek funds in the international financial market.

The operation showed foreigners' interest in big names amid the need to allocate resources, while interest rates in major economies remain on the ground.

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

The figure above 10 billion dollars had not been seen for a long time in funding made by Brazilian issuers.

The bonds have a value of 1,5 billion dollars, maturing on January 3, 2031, coupon of 5,6% per year (pa) and issue price of 99,993%, while maturing on June 3, 2050 the amount is US$ 1,75 billion, coupon of 6,75% pa, issue price of 98,110% and investor yield of 6,9% pa.

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