26 de enero de 2016 / 1:15 / en 2 años

Santander says overweight Brazil's Petrobras bonds on asset-sale outlook

RIO DE JANEIRO, Jan 25 (Reuters) - Santander Investment Securities said it has an “overweight” recommendation on the bonds of Brazil’s state-led oil company Petroleo Brasileiro SA on expectation its asset-sale plans and cost cutting efforts will reduce debt.

After meeting company executives, analyst Aaron Holsberg said that executives at Petrobras, as the company is known, have made divestments a high priority and expect to raise $12 billion from asset sales this year and that in a best-case scenario all the proceeds could be used to pay principal on debt.

In the note to clients, Holsberg also praised cost-cutting efforts that cut long term annual spending averages to half what they were in recent years.

“Petrobras’ greatest achievement in 2015, in our view, was the reduction of capex to a $20 billion/year run rate in the third quarter of 2015, the same level Petrobras is guiding to in both its 2016 budget and 2016-2020 plan,” he said.

Petrobras’ approximately $130 billion of debt is the largest in the world oil industry and one of the largest of any non-financial company. Executives in December promised to sell $15 billion of assets by the end of 2016.

Holsberg went on to say that he believes the company’s $20 billion of planned annual capital spending is in line with the company’s proposed cash flow as long as the exchange rate for the Brazilian real remains at about 4 reais to the U.S. dollar.

Petrobras officials were not immediately available for comment after normal business hours.

Other points in his note to clients.

* Petrobras officials told him the company is working on 16 different large asset sale projects.

* Those projects include thermoelectric plans, oil and gas transportation systems and intermediate processing units, chemicals businesses and utilities.

* The company is willing to sell control of nearly all assets on the block except for its fuels distribution unit BR Distribuidora SA, which it considers core and only contemplates the sale of a minority stake.

* Investor interest is highest from Europe and Asia, especially China and Japan, management said.

* Petrobras has alternatives to asset sales as backup financing plans, including loans from Chinese organizations, the sale and leaseback of ships and other assets, asset-secured loans and negotiated rollovers with Brazilian bank creditors.

* The company continues to seek discounts in day rates from its suppliers of oil rigs, platforms and other leased equipment in exchange for longer contracts and other improved terms. (Reporting by Jeb Blount and Guillermo Parra-Bernal; Editing by Diane Craft)

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