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Petrobras Signs US$4.35 billion Revolving Credit Facility

Source: 3/8/2018, Location: South America

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Petrobras has signed with a syndicate of 17 banks, a revolving credit facility (RCF) in the amount of US$ 4.35 billion, with maturity in March 2023. Through the instrument, the company may make withdrawals from the line until the month prior to maturity.

The product is used for the first time by Petrobras, and it will cost 0.51% p.a. for the maintenance of the limit with the banks. In the case of withdrawals, the cost of the line is fixed at 6M Libor + 1.7% p.a., if the rating of the company at the time of drawing is below investment grade, and 6M Libor + 1.3% p.a., if the company has investment grade rating as of the date of drawing.

This contract creates yet another cash availability alternative for the company to use according to its needs. As such, Petrobras may use its cash for early repayment of current debts, allowing for the reduction of the carrying cost of debt.

The participation of the banks in this transaction is described below:
- Joint Bookrunners: BNP Paribas, Citibank, Credit Agricole and Mizuho;
- Senior Mandated Lead Arranger: The Bank of Tokyo-Mitsubishi UFJ;
- Mandated Lead Arrangers: Bank of America, Bank of China, HSBC Bank, JPMorgan Chase Bank, Morgan Stanley, Banco Santander Brasil and The Bank of Nova Scotia;
- Lead Managers: Deutsche Bank and Standard Chartered Bank;
- Participants: Sumitomo Mitsui Banking Corporation, ING and Commerzbank.

The transaction is in line with the company’s liability management strategy, which aims to improve the amortization profile and reduce the cost, taking into consideration the deleveraging goals under its 2018-2022 Business and Management Plan.

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Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

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