Brazilian companies have burst back into the international bond markets, ending a six-month shut-out caused by mounting concerns around a corruption investigation centered on Petrobras.
Votorantim Cimentos was the first, tapping European investors for a €500m seven-year bond on May 7. The deal from the triple B rated borrower was taken as a sign of confidence in Brazilian issuers
Photo: Rodnel Reis/Flickr
Itaú-Unibanco and JBS have since come to the dollar market with bond sales, finding strong demand and tightening pricing, LatinFinance has heard. Now food producer BRF is said to be preparing to meet European investors next week, with an eye on a potential green bond.
The deal would be just the second green bond from a Latin American borrower, after a transaction from Peruvian wind farm operator Energía Eolica in December.
Containing Petrobras
The bond sales from Brazilian issuers follow Petrobras’ release of 2014 financial statements in April. It had delayed the release of its third and fourth quarter results because of a corruption investigation into former officials at the company and at related firms. The rapidly widening nature of the probe made it difficult for the Petrobras to calculate the ultimate cost of the corruption uncovered.
Petrobras posted a loss of BRL21.59bn ($7.17bn) in 2014, taking a sharp hit because of the corruption. Yet the mere publication of the results was seen as positive because if the delay had continued, creditors could have had cause to accelerate the company’s debt.
The oil and gas company further advanced its return to a normal result publishing schedule when it released its first quarter 2015 statements earlier this month.
Petrobras said it was fully funded for 2015 in its financial statements. However, that has not stopped it from looking for liquidity all the same. Recently, the board approved plans for a local market debenture sale. LF