The Rising Influence of Rising Affluence

[DewDiligence]

PBR issues $2.5B of 100-year(!) bonds at 8.45%:

http://finance.yahoo.com/news/petrobras-goes-century-150735525.html

Brazil's Petrobras bet big and won this week after printing a US$2.5bn Century bond - the largest-ever trade with this tenor and the oil company's first bond sale since a corruption scandal locked it out of the capital markets last year.

Few thought the company, still reeling from a high-profile investigation into kick-backs, was prepared for a capital markets comeback, let alone a rare 100-year offering.

…Critics were quick to question the logic of investing in a 100-year bond ahead of US rate hikes, especially one issued by an oil company racked by controversy and whose proven reserves last just 17 years. Nor did many bankers understand why the world's most indebted issuer would raise long-term money when cheaper funding options were available elsewhere along its [yield] curve.