Petrobas and China’s CDB agree $10bn loan as bonds hit junk status

PetrobasBrazil’s financially pressed state-controlled energy company Petróleo Brasileiro (Petrobas) has secured a $10bn loan from the China Development Bank (CDB) in return for supplying petroleum to Chinese companies, it announced last Friday. Increasingly strapped for cash by falling oil prices, Petrobas bonds that are due to mature in 2020 are trading at just 75 cents on the dollar – effectively ‘junk bond’ status – reflecting investor doubts about the company’s ability to repay creditors.
On Monday, Petrobras Chief Executive Jose Sergio Gabrielli said that the company was seeking financing from foreign governments to bankroll an aggressive investment plan. Six terminals in the north of the country with a total estimated value of $441bn are due to be auctioned off next month, with a further 20 more terminals earmarked for sale later in the year.

Source: reuters