SAO PAULO: Brazil’s state-controlled oil producer Petroleo Brasileiro SA (Petrobras) has sold US$2bil of bonds in global markets, joining a flurry of companies and governments selling debt this week.
The offering was split evenly between two tranches of five- and 10-year notes, according to a source.
The deal is priced at yields of 5.35% and 6.55%, respectively, tightening from initial discussions, the source said.
The oil company is joining several other corporates that recently announced sales in global markets as activity picks up following the Labour Day break.
Pulp producer Suzano SA sold US$1bil in new bonds on Wednesday, while copper miner Antofagasta sold US$600mil in fresh debt on Tuesday.
Petrobras’s last dollar bond sale was a year ago, when the Rio de Janeiro-based oil producer sold US$1bil of debt due in 2035.
Yields on the notes have fallen about 12 basis points since then to 6.17%.
Revenue from the latest sale will be used for general corporate purposes, the company said in a statement.
Emerging economies from Brazil to Saudi Arabia are taking advantage of the increased appetite for debt.
Global EM-dedicated bond funds saw their 19th consecutive week of inflows in the week through Aug 27, Bank of America Corp said last Friday, citing EPFR Global data.
The extra yield investors demand to hold emerging-market sovereign bonds over similar US Treasuries is hovering near the lowest levels since around early 2020, according to JPMorgan Chase & Co data.
“September has a reputation for being a month with more volatility and we are coming off record valuations in everything,” said Eduardo Ordonez, a debt portfolio manager at BI Asset Management in Copenhagen.
Borrowers are seizing “the moment in case the risk-off mood strikes”.
For Petrobras, the sale comes at a time when the oil producer and its peers are curbing investments in response to lower oil prices.
Chief executive officer Magda Chambriard has vowed to tighten spending to navigate the challenging scenario of lower oil prices.
The oil producer should reduce its budget for exploration in its next five-year spending plan, she told Bloomberg in August.
Banco Bilbao Vizcaya Argentaria, Citigroup Inc, Deutsche Bank AG, Banco Itau BBA, Banco Santander SA, and UBS Group AG are handling the issuance, according to a statement. — Bloomberg
