Petbra bonds recover but CEO sacking raises Brazil doubts

Petrobras, 575, LatAm, oil, quasi sovereign, Brazil
By Oliver West
25 Feb 2021

Spreads on Petrobras’s bonds recovered most of their lost ground this week after a sharp sell-off followed Brazilian president Jair Bolsonaro sacking the company’s chief executive on Monday. But while strong quarterly results released on Wednesday were a reminder of the state-owned oil and gas giant’s fundamental strength, Bolsonaro’s actions have led to questions around policy decisions in an economy with major fiscal issues.

Petrobras’s Ba2/BB-/BB- rated bonds slumped by up to seven points on Monday, after Bolsonaro nominated retired general and former defence minister Joaquim Silva e Luna as its new CEO. One analyst decried “corporate statism” as others saw the decision as a warning about the direction of Brazil’s ...

Already a subscriber?

Continue reading this article

Try full access to GlobalCapital

Free trial