Petrobras begins book building for R$3bn bond issue

Petrobras started accepting investment applications for its R$3 billion debenture issue, which is expected to serve as a barometer of demand for infrastructure-linked bonds whose returns include a percentage of the Certificate of Interbank Deposit (CDI) rate. The issue comprises three tranches, two of them consisting of income-tax exempt infrastructure bonds returning official inflation gauge IPCA plus 3.60% (10 years) and another offering IPCA plus 3.90% over 15 years. The third tranche is the CDI-linked one and matures in seven years. Eleven Investimentos analysts Frederico Khouri and Odilon Costa warned in a report that the third tranche features an “unattractive” relationship between risk, return and liquidity given the outlook of declining interest rates.

Source: Valor Econômico