Petrobras reopens foreign debt markets for Brazilian corporates
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...