State-owned Petroleo Brasileiro will return to global debt markets for the first time since last yearjoining a wave of sales by other emerging market companies and governments.
Petrobras will issue dollar-denominated bonds maturing in 2035, according to sources familiar with the matter, who asked not to be identified because they are not authorized to speak publicly. ANDThe initial expected price is a yield of 6.5%, the sources said.
“The risk-reward ratio seems unbalanced” as Petrobras spreads have been too low, said Eduardo Ordonez, a debt portfolio manager at BI Asset Management in Copenhagen. “Sure, it can be a stable carry, but you are exposed to political headlines and a more aggressive capital expenditure policy.”
The securities will be unsecured obligations of Petrobras Global Finance and will be fully guaranteed by the company, according to a statement. The proceeds will be used to repurchase bonds and for general corporate purposes. Along with the debt sale, Petrobras also announced a cash tender offer.
Petrobras’ last dollar bond offering was in June 2023, when the Rio de Janeiro-based oil company sold $1.25 billion in bonds maturing in 2033.
Petrobras joins several other Brazilian companies that have recently announced sales in global markets. The board of Centrais Elétricas Brasileiras, known as Eletrobras, approved this week the issuance of bonds abroad, while Suzano gave banks the mandate to hold calls with investors regarding a possible issuance of debt in renminbi.
In emerging markets, Uruguay announced on Tuesday that it will sell dollar-denominated bonds and Hungary will offer yen-denominated bonds for the first time since 2022.
