Brazilian Real Rises on News of Petrobras Bond Offering

Brazil's state-run oil producer is said to be planning an $11 billion bond sale, a record for emerging markets.

Brazil’s real posted the only gain against the dollar among major currencies, as Petroleo Brasileiro SA offered a record $11 billion of bonds.

The real appreciated 0.6 percent to 2.0087 per U.S. dollar at 4:33 p.m. in Sao Paulo, the biggest gain on a closing basis since April 24. Swap rates on the contract due in January 2017 declined three basis points, or 0.03 percentage point, to 8.97 percent today.

Petrobras, as the state-run oil producer is known, is offering fixed-rate bonds due in three, five, 10, and 30 years as well as three- and five-year floating-rate notes, according to a person familiar with the transaction who asked not to be identified because terms aren’t set. The world’s biggest producer in waters deeper than 1,000 feet (305 meters) plans to borrow $20 billion this year through bond sales and loans to help finance the oil industry’s biggest investment plan, Chief Financial Officer Almir Barbassa said April 29. The sale would be the fifth-largest dollar-denominated corporate bond issue ever and the second-biggest this year after Apple Inc.’s $17 billion offering last month, according to data compiled by Bloomberg.

The real is rallying on speculation Petrobras will exchange some of the money it raises into local currency, according to Joao Paulo de Gracia Correa, currency manager at Correparti Corretora.

“The real is going against the rest of the currencies due to expectations for Petrobras’s bond sale,” he said in a phone interview from Curitiba, Brazil. “The market is expecting Petrobras to exchange more dollars.”

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