Petroleo Brasileiro SA is becoming less of a default risk in the eyes of bondholders, despite the oil producer’s mounting losses in the wake of an unprecedented bribery scandal.
That’s because the Brazilian real’s 8.1 percent surge this year against the dollar — the second-biggest gain in the world — is bolstering the state-controlled company’s ability to repay debt denominated in U.S. currency. Yields on Petrobras’s $1.6 billion of bonds due in March 2017 have plunged almost six percentage points from a three-month high on Jan. 20. The securities now yield less than notes maturing in 2024, a reversal of the so-called inverted curve that prevailed just two months ago.
Brazil Energy Insight 
Leave a comment