Petrobras launches $3bn buyback

Petrobras launches $3bn buyback

Bonds Capital Markets Energy Brazil

Brazilian state oil firm Petrobras will repurchase up to $3bn in euro, pound and dollar-denominated notes, a DCM banker in the deal confirmed to LatinFinance.

“They are sitting on a lot of cash after selling Tag,” said the banker, adding that the company may pursue additional buybacks in the near future.

Petrobras sold its 90% stake in the gas pipeline operator for BRL33.5bn ($8.7bn) in mid-June as part of a plan to divest a string of assets to improve its balance sheet.

The buyback will take place in two stages: Petrobras will first repurchase four series and three series of euro and dollar bonds, respectively, each amounting to EUR1.76bn and GBP1.72bn. The company has offered to pay a premium for 1% to 1.25% to bondholders who tender their notes by July 8, said the banker.

The second stage will feature the redemption of 10 bond series paying a coupon of 5.625% under a waterfall structure by July 15. The deal will take place if the first round fails to meet the $3bn target.

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