PETROBRAS ANNOUNCES CLOSING OF OFFERING OF U.S. DOLLAR-DENOMINATED GLOBAL NOTES AND FINAL RESULTS AND SETTLEMENT OF CASH TENDER OFFERS

Rhea-AI Summary

Petrobras (NYSE: PBR) announced the settlement of its US$1.0 billion 6.000% Global Notes due 2035 offering and the final results of cash tender offers for outstanding notes. The new notes, issued by Petrobras Global Finance B.V. (PGF), have a 6.000% coupon and 6.250% yield to investors, maturing on January 13, 2035.

PGF accepted for purchase approximately US$918.4 million in aggregate principal amount of various series of notes in the tender offers. The offers expired on September 9, 2024, and settled on September 13, 2024. This capital markets activity demonstrates Petrobras' active management of its debt profile and investor relations.

Positive

• Successful issuance of US$1.0 billion in new notes, indicating strong market demand
• Repurchase of approximately US$918.4 million in outstanding notes, potentially improving debt profile
• New notes offer a competitive 6.000% coupon rate

Negative

• Increase in long-term debt with the issuance of US$1.0 billion in new notes

Insights

Financial Analyst

Petrobras's successful US$1 billion bond offering and concurrent tender offer demonstrate the company's proactive approach to debt management. The new 6.000% notes due 2035, priced at a 6.250% yield, reflect investor confidence in Petrobras's long-term prospects. By repurchasing $918.4 million of outstanding notes, the company is effectively extending its debt maturity profile and potentially reducing interest expenses.

The transaction's timing, amid volatile market conditions, suggests Petrobras's strong market access. However, the 6.250% yield on the new notes indicates investors still demand a significant premium, likely due to Brazil's country risk and oil market uncertainties. Overall, this refinancing exercise should improve Petrobras's financial flexibility, but investors should monitor the company's leverage ratios and future capital allocation decisions.

Oil Industry Expert

Petrobras's bond issuance and debt restructuring reflect a broader trend in the oil and gas sector, where companies are capitalizing on current market conditions to optimize their capital structures. The successful US$1 billion raise suggests investor confidence in Petrobras's operational strategy and Brazil's energy sector outlook.

However, the 6.000% coupon rate is relatively high for a quasi-sovereign entity, indicating persistent risk perceptions. This could be attributed to factors such as Brazil's political landscape, global energy transition challenges and Petrobras's historical governance issues. Investors should closely monitor how Petrobras balances its strategic investments in offshore oil projects with the growing pressure for decarbonization, as this will be important for the company's long-term value proposition.

RIO DE JANEIRO, Sept. 16, 2024 /PRNewswire/ -- Petróleo Brasileiro S.A. – Petrobras ("Petrobras") (NYSE: PBR) today announced (i) the settlement of the international capital markets offering of US$1.0 billion 6.000% Global Notes due 2035 (the "New Notes and such offering, the "New Notes Offering"), issued by its wholly-owned subsidiary, Petrobras Global Finance B.V. ("PGF") and (ii) the final results and settlement of the previously announced cash tender offers by PGF, with respect to any and all of PGF's outstanding notes of the series set forth in the table below (the "Notes" and such offers, the "Offers").

The terms of the New Notes are as follows:

	•	Issue: 6.000% Global Notes due 2035
	•	Amount: US$1,000,000,000
	•	Coupon: 6.000%
	•	Interest Payment Dates: January 13 and July 13 of each year, commencing on January 13, 2025
	•	Issue price: 98.128%
	•	Yield to Investors: 6.250%
	•	Maturity: January 13, 2035

The settlement of the New Notes Offering occurred on September 13, 2024.

The following table sets forth the aggregate principal amount of Notes validly tendered and accepted for purchase in the Offers: 

Title of Security		CUSIP/ISIN		Principal Amount Tendered and Accepted
5.093% Global Notes Due January 2030		71647N BE8, 71647N BF5, N6945A AL1 / US71647NBE85, US71647NBF50, USN6945AAL19		US$180,759,000
5.600% Global Notes Due January 2031		71647NBH1 / US71647NBH17		US$216,429,000
5.500% Global Notes Due June 2051		71647NBJ7 / US71647NBJ72		US$102,408,000
5.625% Global Notes Due May 2043		71647NAA7 / US71647NAA72		US$19,915,000
6.750% Global Notes Due June 2050		71647NBG3 / US71647NBG34		US$219,012,000
6.900% Global Notes Due March 2049		71647NBD0 / US71647NBD03		US$203,422,000

The Offers expired at 5:00 p.m., New York City time, on September 9, 2024 and settled on September 13, 2024.

The Offers were made pursuant to the terms and conditions set forth in the offer to purchase dated September 3, 2024, and the accompanying notice of guaranteed delivery (together, the "Offer Documents").

The aggregate amount paid by PGF to holders whose Notes were accepted for purchase, excluding accrued and unpaid interest, was approximately US$918.4 million.

PGF engaged BofA Securities, Inc., Banco Bradesco BBI S.A., HSBC Securities (USA) Inc., J.P. Morgan Securities LLC, Mizuho Securities USA LLC and Morgan Stanley & Co. LLC to act as joint bookrunners with respect to the New Notes Offering and to act as dealer managers with respect to the Offers.  Global Bondholder Services Corporation acted as the depositary and information agent for the Offers.

This announcement is for informational purposes only, and does not constitute an offer to purchase or a solicitation of an offer to sell any securities.

The Offers were made solely pursuant to the Offer Documents.  The Offer Documents have not been filed with, and have not been approved or reviewed by any federal or state securities commission or regulatory authority of any country.  No authority has passed upon the accuracy or adequacy of the Offer Documents or any other documents related to the Offers, and it is unlawful and may be a criminal offense to make any representation to the contrary.

Notice to Prospective Investors in the United Kingdom

The communication of this announcement and any other documents or materials relating to the New Notes Offering and the Offers is not being made and such documents and/or materials have not been approved by an authorized person for the purposes of Section 21 of the Financial Services and Markets Act 2000.  This announcement and any other documents related to the New Notes Offering and the Offers are for distribution only to persons who (i) have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"), (ii) are persons falling within Article 49(2)(a) to (d) ("high net worth companies, unincorporated associations, etc.") of the Order, (iii) are outside the United Kingdom, (iv) are members or creditors of certain bodies corporate as defined by or within Article 43(2) of the Order, or (v) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000) in connection with the issue, sale or offer to purchase of any securities may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as "relevant persons").  This announcement and any other documents related to the New Notes Offering and the Offers are directed only at relevant persons and must not be acted on or relied on by persons who are not relevant persons.  Any investment or investment activity to which this process release and any other documents related to the New Notes Offering and the Offers are available only to relevant persons and will be engaged in only with relevant persons.

Forward-Looking Statements
This announcement contains forward-looking statements.  Forward-looking statements are information of a non-historical nature or which relate to future events and are subject to risks and uncertainties.  No assurance can be given that the transactions described herein will be consummated or as to the ultimate terms of any such transactions.  Petrobras undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information or future events or for any other reason.

For further information, please contact:

Michael Cox
Head of Media Relations & Financial Communications
Telephone: +61 2 8650 5560
Mob: +61 429 465 227 
Email: michael.cox@apa.com.au 

View original content:https://www.prnewswire.com/news-releases/petrobras-announces-closing-of-offering-of-us-dollar-denominated-global-notes-and-final-results-and-settlement-of-cash-tender-offers-302248471.html

SOURCE Petróleo Brasileiro S.A. - Petrobras

FAQ

What was the total amount of Petrobras' (PBR) new notes offering in September 2024?

Petrobras (PBR) issued US$1.0 billion in 6.000% Global Notes due 2035 through its subsidiary Petrobras Global Finance B.V.

What was the yield to investors for Petrobras' (PBR) new notes issued in September 2024?

The yield to investors for Petrobras' (PBR) new notes issued in September 2024 was 6.250%.

How much did Petrobras (PBR) repurchase in outstanding notes through its tender offers?

Petrobras (PBR) repurchased approximately US$918.4 million in aggregate principal amount of various series of outstanding notes through its tender offers.

When did Petrobras' (PBR) cash tender offers for outstanding notes expire?

Petrobras' (PBR) cash tender offers for outstanding notes expired at 5:00 p.m., New York City time, on September 9, 2024.