Brazil
On February 6, we completed the issuance of the Global Notes on the international capital markets. The transaction, carried out by our wholly owned subsidiary, Petrobras International Finance Company (PifCo), raised $7 billion in funds. The transaction, priced on Feb. 1, 2012, consisted of the issuance of notes due in 2015 and 2017 and of the reopening of the bonds due in 2021 and 2041.
The transaction was executed on a single day. The demand surpassed $25 billion as a result of more than 1,600 orders placed by more than 700 investors.
This issuance sets these records:
- Largest ever Brazilian international bond offering
- Largest emerging market corporate bond offering in recent years
- Lowest cost for a Brazilian company in 3- and 5-year terms
- Lowest cost for the 10-year term ever raised by Petrobras
- Lowest cost for a 30-year term for a Brazilian Company.
The final allocation concentrated mostly in the United States (58.4%), Europe (28.1%) and Asia, largely dedicated to the high grade market.
The success of the transaction shows investor confidence in the Company's fundamentals, in its growth strategy and in its commitment to maintaining its investment grade, as indicated by the monitoring of the debt ratio targets and by the significant cash generation levels. Additionally, the transaction is aligned with the fund-raising strategy announced by the Company to access the market at specific moments and for volumes required for the financing of investments as defined in the Business Plan.
The following is the main information on the issue and reopening:
| Characteristics New Issue |
Bonds due in 2015 |
Bonds due in 2017 |
|---|---|---|
| Volume | $1.25 billion | $1.75 billion |
| Coupon | 2.875% | 3.50% |
| Issue Price | 99.499% | 99.419% |
| Investor yield | 3.051% | 3.628% |
| Due date | 02/06/2015 | 02/06/2017 |
| 1st InterestPayment Date | 08/06/2012 | 08/06/2012 |
| Interest Payment Dates | 02/06 and 08/06 of each year | 02/06 and 08/06 of each year |
| Characteristics Reopening |
Bonds due in 2021 |
Bonds due in 2041 |
|---|---|---|
| Reopening volume | $2.75 billion | $1.25 billion |
| Total volume after reopening | $5.25 billion | $2.25 billion |
| Coupon |
5.375% | 6.750% |
| Reopening price | 104.181% | 111.208% |
| Yield for the original Investor | 5.401% | 6.806% |
| Yield for the reopening Investor | 4.796% | 5.935% |
| Due date | 01/27/2021 | 01/27/2041 |
| InterestPayment Dates | 01/27 and 06/27 of each year | 01/27 and 06/27 of each year |
The ratings of the Notes were Baa1 (Moody's), BBB (Standard & Poor's) and BBB (Fitch) and Petrobras will use the proceeds to fund investments.
BB Securities Ltd, Citigroup Global Markets Inc., Itau BBA USA Securities, Inc., J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and Santander Investment Securities Inc. were the joint lead managers for the transaction and Banco Votorantim Nassau Branch and Mitsubishi UFJ Securities (USA), Inc. were the co-managers.
