Petrobras completes $4 billion bond issuance in international market

Petrobras completed a $4 billion bond issuance (known as global notes) in the international capital markets through its subsidiary Petrobras Global Finance B.V. (PGF) on Tuesday (Jan. 17). In a statement on its website, the company said the leverage consisted of two $2 billion tranches due on January 17 2022 and January 17 2027. The order book was $19 billion, almost five times oversubscribed. The five-year-maturity tranche (2022) was issued at a 6.125% annual yield to investors. For the ten-year tranche, the yield will be 7.375% per year. According to Petrobras, these rates are “significantly lower” than last May's five-year maturity 8.625% per year and ten-year maturity 9% per year.

Considering the recent transactions of major issuers, the sale was completed with the lowest coupon levels compared to Petrobras's traded securities. Coupons are the interest rates the bond issuer pays its investors for bonds in the aftermarket.

Recognition

Petrobras's Financial and Investor Relations Director Ivan Monteiro said the offering made on Tuesday was a success and reflects market recognition for Petrobras's liability management strategy adopted in 2016. “It's also a recognition of the results obtained with the partnership and divestment policy and operational performance,” he added.

The haul will help Petrobras repurchase its bonds due on 2019-2020, prolonging its debt payment term.

Petrobras also pointed out it gained recognition from Latin Finance magazine as the company with the best liability management operation in the international capital market for two similar transactions completed in May and July 2016. Last Thursday (12), it received a Corporate Liability Management of the Year award in New York.

Translated by Mayra Borges