Petrobras 100-Yr Bonds Offer Investors ’Juice’: Credit Agricole

“You can’t find many bonds rated (still) investment-grade that are issued with initial price guidance of around 8.85%,” Rafael Elias, Latin America debt strategist at Credit Agricole, writes in e-mailed note to clients.

  • “Petrobras successfully put what perhaps was the most spiny issue behind them when they issued their 3Q and 4Q14 audited financials”
  • Co. reported “strong” results for 1Q15 and made many correct moves, including composition of its board and plan to reduce capex
  • “Bond will seem too attractive to pass for many”
  • “Petrobras still has a lot to do and a lot of work ahead to fully recover from its recent crises. It sill operates in an industry that remains highly uncertain with oil prices that,while recovering, are doing so slightly and in bursts and stops”
  • “Concern comes later. In this environment when nobody really knows when and by how much the Fed will act on rates, longer-duration bonds have tended to underperform”

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