Petrobras completes $4 billion bond issuance in international market

Petrobras completed a $4 billion bond issuance (known as global notes) in the international capital markets through its subsidiary Petrobras Global Finance B.V. (PGF) on Tuesday (Jan. 17). In a statement on its website, the company said the leverage consisted of $2 billion tranches due on 17th January 2022 and 17th January 2027. The order book was $19 billion, almost five times oversubscribed. The five-year-maturity tranche (2022) was issued at a 6.125% annual yield to investors. For the ten-year tranche, the yield will be 7.37% per year. According to Petrobras, these rates are “significantly lower” than last May's five-year maturity 8.62% per year and ten-year maturity 9% per year.

Considering the recent transactions of major issuers, the sale was completed with the lowest coupon levels compared to Petrobras's traded securities. Coupons are the interest rates the bond issuer pays its investors for bonds in the aftermarket.

Recognition

Petrobras's Financial and Investor Relations Director Ivan Monteiro said the offering made on Tuesday was a success and reflects market recognition for Petrobras's liability management strategy adopted in 2016. “It's also a recognition of the results obtained with the partnership and divestment policy and operational performance,” he added.

The haul will help Petrobras repurchase its bonds due on 2019-2020, prolonging its debt payment term.

Petrobras also pointed out it gained recognition from Latin Finance magazine as the company with the best liability management operation in the international capital market for two similar transactions completed in May and July 2016. Last Thursday (12), it received a Corporate Liability Management of the Year award in New York.

Pre-Salt oil production: new record in 2016

Petrobras’ average oil production in Brazil in 2016 went up 0.75% in comparison to the previous year and reached 2,144,256 barrels per day. According to the company, the result was in line with the established target of 2.145 million and represents an annual all-time high.

 In the pre-salt layer, last year’s annual average was also a record with 1.02 million daily oil barrels, which meant at the time an increase of 33% over the previous year.

Regarding natural gas, the company reached the record result of 77 million cubic meters per day. If this performance is included in the year’s balance, the total production of the company in the country reaches 2.63 million barrels of oil equivalent per day, 1% above 2015’s results, which will also set a new record.

The company’s president, Pedro Parente, also highlighted December’s performance, when other records were broken. Among them, the company’s average oil production in Brazil, which for the first time surpassed the mark of 2.3 million daily barrels, 3% above the results registered in September of the same year. On December 28, the production reached 2.4 million oil barrels.

Sources: Agência Brasil and Mercopress Agency