3R Petroleum prices first international bond – LatinFinance

Brazilian oil and natural gas producer 3R Petroleum raised $500 million in its first international bond sale on Monday after investors placed as much as $1.5 billion in orders, according to a source familiar with the deal.

The seven-year, non-call three notes carried a coupon of 9.75% and priced at 99.379 to yield 9.875% after 3R Petroleum opened the initial price talk at around 10% and set the guidance in the low-10% area, the source said.

Morgan Stanley, BTG Pactual, Citi, Deutsche Bank, HSBC, Itaú BBA, Santander and UBS were the joint bookrunners on the Rule 144A/ Reg S deal, the source added.

3R began calling investors last week to pitch the notes. It plans to use the proceeds to refinance a $500 million loan it signed with BTG Pactual and a pool of other banks in August 2022 to acquire the Potiguar cluster of oilfields from Brazil’s state-run oil company Petrobras, according to an investor presentation seen by LatinFinance.

Fitch Ratings assigned the notes an international B+ rating, adding that it “will lengthen 3R’s debt maturity schedule and enhance its liquidity profile.”

More deals could follow this year. The company has a firm placement guarantee for issuing at least BRL900 million debentures in 2024, with a five-year term and a two-year grace period, Fitch said, adding that the proceeds are to be used for liability management.

3R Petroleum sold BRL1 billion ($202 million) worth of 10-year debentures in the local market in October last year to finance investments in the Potiguar and Recôncavo basins. Before that, it issued BRL900 million worth of three-year debentures in September 2022, according to information from Bloomberg.