Petrobras extends market reach as dollar pressures weigh

viernes 14 de febrero de 2014 15:26 GYT

By Paul Kilby

NEW YORK, Feb 14 (IFR) - Financing pressures are sending Petrobras farther afield as it seeks to ease pressures on a dollar curve that has traditionally borne the brunt of its massive capex plan.

A tap in an obscure German private placement market as well as a rare domestic offering are seen as part of the Brazilian oil company's efforts to diversify its reach among international investors.

Easing pressure on its dollar curve has become all important for what is now one of the world's most indebted companies, especially ahead of an annual dollar foray that grows in size each year and subsequently sends funding costs higher.

"You have this supply (issue) hanging over the market, so why buy their bonds in the secondary when you are waiting for this big deal to come," said a New York based banker. "They have nowhere to hide; they need to do a big dollar deal."

By extending its reach to a broader variety of markets and raising substantial sums among domestic investors the company hopes to send a strong message to dollar accounts that they are not the only game in town, bankers say.

For instance, the quasi-sovereign is forging ahead with what is thought to be the first LatAm corporate issuance in the Schuldschein private placement market, following in the footsteps of regional development bank CAF which tapped this market twice in 2012.

"LatAm corporates are rare," said a Europe-based banker. "It is typically used for German mid-caps trying to access the capital markets for the first time without too much disclosure."

The size of the deal has yet to be announced, but Schuldschein trades typically range between 100m and 300m. There are exceptions - CAF's deals, for instance, were less than 100m each and domestic firm Siemens had made an unusually large 1.35bn offering.   Continuación...