Petrobras issues $2.5bn in bonds

GMT 15:21 2015 Tuesday ,02 June

Arab Today, arab today Petrobras issues $2.5bn in bonds

Brazil's Petrobras
Rio de Janeiro - AFP

Brazil's troubled state-run oil giant Petrobras has issued $2.5 billion in bonds as it tapped the market for the first time since a corruption scandal cost it a bundle.

The 100-year bonds were issued Monday in dollars and carry an interest rate of 8.45 percent, the company said in a statement.

It is the first time the company has issued bonds with such a long maturity period.

The bond sale ends Friday.

So far demand for the bonds exceeds supply by a rate of four to one, the newspaper Valor reported.

It said Standard & Poor's and Fitch Ratings gave the bonds a BBB- rating, which would make them investment grade.

But Moody's is more wary and gave the debt a speculative classing.

The company's last bond issues were in January 2014 for more than five billion dollars, and then in March 2014 to the tune of 8.5 billion dollars.

Both of those came before an investigation was announced into the corruption scandal, in which big contractors formed a cartel that bribed Petrobras executives in order to manipulate bids and overbill the company.

Petrobras reported losses of 7.2 billion dollars in 2014, in part because of this system of fraud that existed for a decade.

PricewaterhouseCoopers has estimated that losses specifically from the corruption totaled about 2.06 billion dollars.

The money paid to Petrobras went to personal bank accounts and to finance political parties that included the ruling Workers Party.

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