Yahoo Finance Petrobras' Subsidiary Closes Issuance of $4 Billion Notes
Petrobras Global Finance B.V., a fully owned affiliate of Brazil's state-run energy giant Petroleo Brasileiro S.A. or Petrobras PBR, recently declared the closure of a US$4 billion issuance of 5-year and 10-year notes in international markets.
Out of the US$4 billion notes, 5-year global notes worth US$2 billion are scheduled to mature in 2022. The order book for these notes was five times oversubscribed and these notes carried an interest rate of 6.5%. The remaining 10-year global notes worth US$2 billion, which are slated to mature in 2027, were four times oversubscribed and carried an interest rate of 7.375%.
Petrobras intends to utilize the proceeds from the notes to repurchase notes that are validly tendered and accepted for purchase by Petrobras Global Finance in the previously announced cash tender offers. The remaining proceeds, if any, will be used for general corporate purposes.
Headquartered in Rio de Janeiro, Petrobras is the largest integrated energy firm in Brazil and one of the largest in Latin America. The company’s involvement in the multibillion-dollar money laundering and bribery case not only hurt its goodwill but also put its credit rating at risk, making it difficult for the firm to find creditors. Even though Petrobras failed to achieve its 2015–2016 divestment target of $15.1 billion, it remains on track with its divestment target for 2017–2018 and strives to improve its credit rating.
Over the past year, the Zacks categorized U.S. Oil and Gas Emerging Markets Integrated industry has registered an impressive growth of 61.91%. However, shares of Petrobras have outperformed the industry by surging 143.02%.
Petrobras currently carries a Zacks Rank #3 (Hold), which implies that the stock will perform in line with the broader U.S. equity market over the next one to three months.
Some better-ranked players from the broader energy sector include Braskem S.A. BAK, McDermott International, Inc. MDR and Suncor Energy Inc. SU. All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the last four quarters, Braskem posted an average positive earnings surprise of 105.5%.
In the last quarter, McDermott posted a positive earnings surprise of 250.00%.
In the last quarter, Suncor posted a positive earnings surprise of 300.00%.
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Petroleo Brasileiro SA - Petrobras (PBR): Free Stock Analysis Report
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