Brazilian energy company Petroleo Brasileiro (Petrobras) announced it has sold overseas bonds, raising $8.5 billion for its investment plan. The company sold six sets of dollar-denominated bonds, which include fixed-rate bonds and floating-rate debt, to fund $221 billion spending plan for the next five years. In May, the company made $11 billion from a six-part sale in May 2013, Bloomberg Businessweek reported. Petrobras aims to finance development of some of the largest offshore oil discoveries in the Americas with the money.
"Everyone knows they need the money, and it makes sense for them to raise it now," Carlos Gribel, vice president for emerging markets at INTL FCStone Securities Inc., said in a phone interview with Bloomberg Businessweek.
According to Klaus Spielkamp, a fixed-income trader at Bulltick Securities LLC, Petrobras is providing potential investors with $2.5 billion of 10-year fixed-rate notes that are expected to yield 350 basis points above U.S. Treasuries.
"A year from now, whoever buys it for the long term knows they will face competition again as new bonds come with a higher premium," said Spielkamp.