Brazil’s Petrobras is understood to be monitoring a potential benchmark-sized Q1 bond sale that will likely be combined with a liability management exercise, sources told LatinFinance.
The state-owned oil company will look to roll-over its short-term amortizing debt, a debt capital markets source said.
Oil prices soared after the Organization of the Petroleum Exporting Countries (OPEC) agreed in late November to cut production to 1.2m barrels per day, prompting Latin American oil companies to reconsider opportunistic debt issues, a second debt capital markets source added.
The potential of more interest rate hikes by the US Federal Reserve may also prompt companies to move quickly to take care of any capital raising needs, the first banker said.
Petrobras’ corporate finance manager Bianca Nasser Patrocinio told LatinFinance in November that the company had no immediate plans for a bond issue but did not discard a combination of a tender offer and new issue.
Petrobras is undertaking an ambitious $15.1bn 2015-2016 divestment plan and seeks to push forward debt after it raised $6.75bn from a two-part bond sale in May. Proceeds funded a tender offer to buy back bonds maturing in 2017, 2018, and 2019.
In May, the company sold $5bn in 8.375% five-year notes and another $1.75bn in 8.75% 2026 bonds. The company’s 2026s were offering yields of 7.75%, or a cash price of 106.625 yesterday.