UPDATE 3-Petrobras to raise US$2.5bn via rare Century bond

lunes 1 de junio de 2015 15:40 GYT

(Add final yield and size)

By Paul Kilby and Davide Scigliuzzo

NEW YORK, June 1 (IFR) - Brazilian oil company Petrobras was set to raise US$2.5bn on Monday after launching a rare Century bond - its first international debt foray in over a year.

Launched at 8.45%, the larger-than-expected deal is coming well inside initial price talk of 8.85% area and at the tight end of guidance of 8.55% (plus/minus 10bp) on the back of a multi-billion dollar book.

The rare Century bond turned heads but some questioned whether the company, locked out of debt capital markets for more than a year, was being too ambitious opting for such a long maturity.

Petrobras, still reeling from a wide-ranging corruption scandal, is looking to make a bold statement about its credit-worthiness with Latin America's first corporate Century bond in close to 20 years, according to IFR data.

The company could ill afford a failed deal, and pulled out all the stops to get this deal done successfully by offering juicy new issue concessions on the new issue.

At initial price thoughts of 8.85% area, it was offering a pick-up of approximately 150bp to the 30-year part of the borrower's curve, where the existing 2043s and 2044s have been trading at 7.23% and 7.40% respectively.

At the final yield of 8.45% area, that shrank to around 110bp, but is still considerably wider than the 80bp-85bp differential seen on Mexico's 30s to 100s curve. Mexico is the only other borrower in Latin America that has sold a Century bond in recent years.   Continuación...