|
Petrobras in $1.5bn cash hunt |
 |
|
Brazil's state-run oil giant Petrobras sold $1.5 billion in 10-year dollar-denominated notes to finance part of its hefty investment plan of $174 billion through 2013.
The company took advantage of a recent recovery in investors' appetite for risk to issue the bonds at a yield of 8.125%, below the initial price guidance of 8.25%, market sources said.
Petrobras relies on capital markets to fund a significant part of its investment plan, which has been challenged by a recent plunge in the price of oil. The firm is also in talks with suppliers to cut costs, said a Reuters report.
In a recent interview in London, Petrobras boss Jose Sergio Gabrielli said the company could scale back investment plans if it was unable to raise funds at a "reduced cost."
He had previously said that international bond markets were too expensive for the company, considering its credit ratings.
Petrobras is rated "BBB" by Standard & Poor's and Fitch, one notch above Brazil's sovereign ratings.
Strong investor demand and tightening risk spreads allowed Petrobras to borrow at a lower rate, however.
While yield spreads between emerging-market bonds and US Treasuries 11EMJ narrowed to levels not seen in nearly two months, the book for the current Petrobras issue reached $4.5 billion, reported IFR, a Thomson Reuters publication.
"The bottom line is that there are investors with cash who are looking to put it to work and Petrobras is a very strong company," said Jeff Grills, a fund manager with JPMorgan Asset Management in New York.
He said the bonds were already trading up about 5/8 of a point in the gray market.
The new bonds mature on 15 March and settlement is on 11 February. Banco Santander, JPMorgan and HSBC were the lead managers of the deal.
Source: Upstream
More News:
|
