Petrobras Set to Lever Up

Petrobras plans to significantly increase its leverage ratio over the next several years as it raises funds necessary to extract oil from its most recent discoveries. CEO Jose Sergio Gabrielli says the state-controlled producer can expect to eventually have a 25%-35% debt ratio, up from 17% at the moment. He adds that Petrobras will announce the amount it needs to raise when it details a revised strategic plan in the second half of the year. The official does not see a big change in the sources Petrobras will use for funds – bonds, loans, and export credit financing. “The difference is Brazil is investment-grade and we can tap different investors, but the approach is the same,” Gabrielli says, speaking at a New York presentation sponsored by the Brazilian-American Chamber of Commerce. Petrobras plans to raise $5bn this year, and is widely expected to issue soon to cash in on the sovereign upgrades and a non-deal roadshow in March.