Petrobras to seek up to US$1.3b in local bond sale

[SAO PAULO] Petroleo Brasileiro SA is preparing to sell as much as 4 billion reais (US$1.3 billion) in Brazil's domestic bond market as early as next week, according to a person with knowledge of the matter.

Petrobras, as Brazil's state-run producer is known, is seeking to raise 3 billion reais (US$994 million) through infrastructure bonds, said the person, who asked not to be identified because the plans haven't been made public. The amount could reach 4 billion reais with an additional allotment, the person said.

Banco Bradesco SA, Banco do Brasil SA, Grupo BTG Pactual and Banco Votorantim SA are managing the transaction, the person said. Petrobras is authorized to issue up to US$19.1 billion in debt this year and is constantly looking at opportunities, the Rio de Janeiro-based company said in an e-mailed statement, declining to comment on the local bond sale.

Petrobras, the most indebted oil company with US$133 billion outstanding, is struggling to reduce leverage as it needs to invest in deepwater oil projects to expand production and revenues amid low crude prices. It had been shut out of bond markets since last November when it temporarily halted reporting financial results while it quantified losses from a kickback scheme.

BLOOMBERG