Petrobras Opens Door to 2015 Dollar Bond; Rules Out Share Sale

Petrobras Opens Door to 2015 Dollar Bond; Rules Out Share Sale

By Sabrina Valle/ Bloomberg

3:30 PM BRT
April 23, 2015

Petroleo Brasileiro SA could return to the dollar-bond market as soon as this year after a corruption scandal all but closed off credit markets to Brazil’s national oil company, Chief Financial Officer Ivan Monteiro said.

While a foreign debt issuance is a possibility after the Rio de Janeiro-based driller reported its first audited financial results since August, there are no plans to sell shares, Monteiro said in an interview Thursday.

Petrobras, as the state-run producer is known, posted earnings Wednesday to end a five-month debate on how to book losses from a graft scandal allegedly involving inflated contract prices and kickbacks to executives and politicians. The release averts a potential acceleration of debt payments. The company last sold dollar bonds in March 2014, according to data compiled by Bloomberg.

“If anyone turns up with an opportunity that reflects a smaller issuing cost than what I have in the secondary market, it will be very welcome,” Monteiro said. “It doesn’t mean we’ll do it.”

Monteiro said any sale of new shares to raise money for investments would require congressional approval.

“For a capital increase, this process needs to start a year and a half in advance,” Monteiro said. “Since there are no procedures in the works in the company, and there won’t be any anytime soon, it can’t happen in the next three or four years under any hypothesis.”