Petrobras reopens foreign debt markets for Brazilian corporates

jueves 19 de mayo de 2016 13:59 GYT

By Paul Kilby

NEW YORK, May 19 (IFR) - Oil firm Petrobras threw open the door for Brazilian corporate issuance this week after printing a US$6.75bn bond - the first domestic company to sell foreign debt since June 2015.

Days before Petrobras took the plunge, bankers were spying a window of opportunity for Brazilian borrowers on hopes a new business friendly government would pull Latin America's largest economy out of its worst slump in decades.

Petrobras responded by printing five and 10-year bond on Tuesday - a few days after Congress agreed to start impeachment proceedings against former president Dilma Rousseff and replace her with Michel Temer.

The quasi-sovereign got an overwhelming reception with order books reaching US$21bn for the US$5bn five-year and US$1.75bn 10-year tranches.

This strong demand helped the state-controlled entity squeeze pricing 25bp-37.5bp before printing at a final yield of 8.625% on a US$5bn five-year and 9.00% on US$1.75bn 10-year.

The large order book underscored appetite for a credit seen benefiting from the recent change to a government capable of reviving economic growth in Brazil.

It also assuaged concerns about the fate of Petrobras, now considered the world's most indebted company, and how it would tackle a wall of short-term maturities as funding sources narrowed in the wake of a widening corruption investigation.

"Many worried that Petrobras would do a secured deal or potentially a coercive exchange offer," said Jason Trujillo, a senior analyst at Invesco.   Continuación...