德银新兴市场能源行业个股PetroleoBrasileiro巴西石油公司分析研究20170922De

DeutscheBankMarketsResearchEmergingMarketsBrazilHYCorporateCreditEnergyCompanyPetroleoBrasileiroS.A.Date22September2017AttractiveLMOffers;Preferthe'26svs.the'23s;Buythe'26s&'27s________________________________________________________________________________________________________________DeutscheBankSecuritiesInc.DISCLOSURESANDANALYSTCERTIFICATIONSARELOCATEDINAPPENDIX1.MCI(P)083/04/2017.EduardoVieiraResearchAnalyst(+1)[e-mail]alyst(+1)[e-mail]PetrobraslaunchedcashandexchangeoffersforuptoUSD14.4bnofselectshort-datedbonds(‘19sto‘21s).Thecashoffersareexclusivetonon-QIBsandUSpersonslocatedintheUSandcappedatUSD500mnifnotwaived.Theexchangeoffersdon’thaveacapandeligibleholderswhooptinwillreceivenew‘25sand‘28s.Weviewtheliabilitymanagementtransactionsascreditpositiveduetorelieftodebtamortizationprofileandmarginalreductionininterestrate,despitea2%increaseinnetdebtduetotender/exchangepremia.Iftheexchangeoffersarefullysubscribed,theportionofPetrobras’debtcomingdueby2021woulddeclineto40%from53%oftotaldebt.Werecommendthateligibleholdersacceptthecashandexchangeoffersduetopositivetenderpremiaatcurrentmarketprices,currenttightspreadsforthenotesbeingtendered/exchangedonabsoluteandrelativebasis,andoutsizedcurvesteepnessbetweentheexchangeableandnewnotes.ButbemindfulofuptoUSD13.9bnofnew7-to-11-yearsupplyofPetrobrasbonds,whichcanreachupto26%ofallEMnon-distressedHYcorporatesinthismaturitybucket,asanimportantrisk.WeinitiateatradeideawherewepreferPETBRAUSD‘26svs.PETBRAUSD‘23s,currentlyataZspreaddifferentialof100bp,withatargetZspreaddifferentialof80bp,followingtheexcessiveunderperformanceofPETBRA‘26s,inourview,aftertheannouncementoftheexchangeoffers.ThistradeideaisalsobackedbyourperceptionofpositivemomentumforPetrobrasandBrazilfortheremainderoftheyear,withPetrobrasgeneratingpositivecashflowataBrentpriceaboveUSD38/bbl,ourexpectationoffurtherpositiveheadlineactivityrelatedtothecompany’sdivestmentprogramandcompensationfromthegovernmentfromthe2010capitalincreaseadjustments,andBrazilbenefittingfromaratingaffirmationbyS&PinAugustamidastabilizationofthepoliticalenvironmentandimprovementinmacroindicators.Inlightofthisweek’sunderperformanceandcurrentpositiverelativevalueofPetrobras’9-and-10-yearnotes(inabsolutetermsandrelativetothePETBRAcurveandLatAmcorporatepeers)andbasedonourbenignoutlookforPetrobrasandBrazilfortheremainderoftheyear(aswellasourconstructivestanceonEMcreditfundamentalsandneutralviewonEMcreditspreads),weupgradePetrobras’USDnotesdue2026and2017(PETBRA‘26sand‘27s)toBuyfromHold.ThekeyriskfactorstoourBuyandHoldrecommendationsonPetrobras,aswellastoourcurveflatteningtradeidea(PETBRA‘26svs.‘23s)andtoourrecommendationsforholdersofOldNotestoaccepttheExchangeOffersinclude,inourview:1)positivecreditprofileandnegativebondspreadcorrelationtointernationaloilpricesandtoproductiontrajectory;2)executionriskonthecompany’sUSD21bndivestmentprogram;3)sizablenear-termdebtmaturities(USD48-62bndueby2021dependingontheoutcomeoftheExchangeOffers);4)Brazil’sfragilefiscalsituationandpresidentialelectionsin2018;and5)generalrisksforEMcredit.Distributedon:22/09/201721:21:27GMT0bed7b6cf11c22September2017HYCorporateCredit,EnergyPetroleoBrasileiroS.A.Page2DeutscheBankSecuritiesInc.CreditpositiveandmostlyattractivecashandexchangeofferslaunchedbyPetrobrasCashandexchangeoffersforuptoUSD14.4bnofselectshort-datedbonds(‘19sto‘21s);cashoffersexclusivetonon-QIBsandUSpersonslocatedintheUSandcappedatUSD500mnifnotwaived;nocapforexchangeoffersintonew‘25sand‘28s;weviewthetransactionsascreditpositiveduetorelieftodebtamortizationprofileandmarginalreductionininterestratedespitea2%increaseinnetdebtduetotender/exchangepremiaOnSeptember18,PetroleoBrasileiro(Petrobras,PETBRA)announcedandpricedUSD1bnof5.299%USDnotesdue2025(the‘25s)andUSD1bnof5.999%USDnotesdue2028(the‘28s)–bothissuesbeingseniorunsecuredandrankingparipasutoexistingbondsissuedbythecompany,withstateduseofproceedsforgeneralcorporatepurposes,includingdebtrefinancing,butalsoservingasbenchmarksfortwoconcurrentliabilitymanagement(LM)transactionsannouncedonthesamedate.ThesetwoLMtransactionsexpireat5:00pmNYCtimeonSeptember22unlessextendedandincludeofferstopurchaseforcash(theCashOffers)orexchangefornew‘25and‘28notes(theExchangeOffers)fiveoutstandingissues:the7.875%‘19s,4.875%‘20s,5.75%‘20s,5.375%‘21sand8.375%‘21s(theOldNotes).TheCashOffersareeligibleonlytoholderswhoareneitherQIBs(withinthemeaningoftheRule144AundertheSecuritiesAct)nornon-U.S.persons(asdefinedinRule902undertheSecuritiesAct)locatedoutsidetheUnitedStateswithinthemeaningofRegulationSundertheSecuritiesAct,whiletheExchangeOffersareeligibletoholderswhoarenoteligibletotheCashOffers–theExchangeOffersarealsonoteligibletoholderseligibletotheCashOffers.Thecashandexchangeoffersarethusmutuallyexclusivetoeligibleholdersofeachtypeofoffer.TheCashOffersconsistoffiveseparateofferstopurchaseforcashatapredeterminedprice(showninthetablebelow)anyandallofeachseriesofOldNotes,subjecttoamaximumtenderamountforeachser