State-controlled Petróleo Brasileiro SA plans to sell five- and 10-year dollar-denominated bonds as early as Tuesday, the first global offering of bonds by any Brazilian company since last June, as the debt-laden Brazilian oil producer seeks to ease repayment risk in coming years.
Rio de Janeiro-based Petrobras announced the offering in a securities filing, alongside a plan to repurchase up to $3 billion of bonds due in 2018 or debt bearing interest of 8.375 percent. The deal is subject to consent of most bondholders, who will also be asked for their permission to change contractual terms of the securities, the filing said.
The new bonds are expected to be rated “B3” by Moody’s Investors Service, six levels below investment-grade, two sources familiar with the deal said. Until a sweeping corruption scandal that rocked the company and a slump in oil prices undermined the company’s finances, Petrobras had a debt rating higher than the Brazilian government’s.
The offering is Petrobras’s first attempt to sell bonds in global debt markets since June 1, when the company placed $2.5 billion worth of bonds maturing in 2115. The last Brazilian company to sell debt to international investors was planemaker Embraer SA, which sold $1 billion of 10-year bonds on June 8, according to Thomson Reuters data.