Petrobras raised US$2 billion from the sale of seven- and 10-year securities, replacing more expensive shorter-dated bonds as it seeks to trim a debt burden that is the largest among major oil firms. Petrobras sold US$1 billion each worth of senior unsecured bonds due in 2025 and 2028, respectively. Market experts said Petrobras sold the January 2025 bond at a yield of 5.3%, and the January 2028 bond at 6%.
The company had proposed interest of between 5.35% and 5.5% for the 2025 security, and around 6% for the note due in 2028. Simultaneously, Petrobras has proposed that holders of different notes maturing between 2019 and 2021 either tender their debt or swap it for longer-dated securities. The deadline for the swap and repurchase tenders is 5 p.m. ET (2100 GMT) on Sept. 22, the filing said.
The transaction, which follows a significant improvement in Brazil’s investment risk profile, underscores how Petrobras has regained the ability to obtain financing, both locally and overseas, amid efforts by Chief Executive Officer Pedro Parente to cut US$85 billion of net debt.
Over the past week, Petrobras has refinanced over US$2 billion in trade finance and other types of loans with local and international lenders, smoothing out looming amortizations through the end of the decade.
Petrobras , Brazil’s largest state-controlled firm, has been forced to sell assets and slash spending as it recovers from the plunge in oil prices and a giant price-fixing, bribery and political kickback scandal.
It has hired the investment-banking units of Bank of America Corp, Banco do Brasil SA, Citigroup Inc, Credit Agricole SA, HSBC Holdings Plc, JPMorgan Chase & Co, and Banco Santander SA to manage the offering.