Demand for a new debt offering by Petrobras, Brazil's state-run oil producer, is approaching $11 billion, easily surpassing the $3 billion the company plans to issue. The strong demand could encourage the company to issue more than $5 billion in bonds maturing in five, 10 and 30 years, Reuters reported.
Petrobras (PBR) is planning to raise $15 billion to $16 billion this year to help fund its massive exploration budget, which calls for $224 billion in expenditures through 2014, but has not said where the funds will come from. The company sold $70 billion in new shares last year in the world's largest ever share offering.
The five-year bonds will be priced at 195 basis points above comparable U.S. Treasuries while the 10-years will be priced 200 basis points above Treasuries and the 30-years will be priced 225 basis points above Treasuries. The deal is expected to price on Thursday, according to Reuters.
BTG Pactual, Citigroup, HSBC, Itau, JP Morgan and Santander are managing the offering for Petrobras. At 23% of total assets, Petrobras has the highest debt-to-assets ratio of any of the world's 10 biggest energy firms.