UPDATE 3-Petrobras tests investor sentiment with $6.75 bln bond sale

May 17 State-controlled Petróleo Brasileiro SA raised $6.75 billion on Tuesday through a sale of five- and 10-year dollar-denominated bonds, in a closely watched return to global capital markets after the suspension of Brazilian President Dilma Rousseff.

The bond sale is the first by any Brazilian company since last June and the first to test investor sentiment toward Brazil since Rousseff was removed from office last week to face an impeachment trial.

Petrobras, as the company is known, also announced a plan to repurchase up to $3 billion of bonds maturing in 2018 and debt bearing interest of 8.375 percent.

Analysts and investors have said Petrobras, which for years was Rousseff’s favorite tool to implement policies that helped drive Brazil into a recession not seen in eight decades, could gain most from the change in Brazil’s leadership. For years, Rousseff forced Petrobras to borrow beyond capacity and overspend to bolster her Workers Party’s political agenda. It is now saddled with the oil industry’s largest debt.

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