Petrobras Wants to Buy Back US$ 1 Billion in Bonds

Brazil’s state-controlled oil company Petróleo Brasileiro S.A., better known as Petrobras announces that its wholly owned subsidiary Petrobras International Finance Corporation (PIFCo) has commenced a cash tender offer for five series of notes.

It intends to repurchase up to US$ 1 billion in dollar-denominated bonds. The offer expires at 5 pm of July 24, New York time.

PIFCo has retained The Bank of New York as depositary for the offers, The Bank of New York (Luxembourg) S.A. to serve as Luxembourg agent for the offers and D.F. King & Co., Inc. as information agent.

According to the company, this transaction is intended to allow Petrobras and PIFCo to reduce overall indebtedness and take advantage of their strong cash flow generation.

In addition, since Petrobras and PIFCo received an investment grade rating in October 2005 by Moody’s Investor Service, they expect to have an ability to raise funds on more favorable terms than were available at the time PIFCo issued the original notes.

Petrobras produces 1.9 million barrels of oil a day, in Brazil alone. When its foreign production is included, this amount goes up to 2.3 million barrels. Record oil prices this year have represented a bonanza for the state company.

The notes being bought back include the 12.375% bond maturing April 1st, 2008; the 9.875% bond that matures May 9, 2008; the 9.75% bond with July 6, 2011 maturity date; the 9.125% bond maturing July 2, 2013; and also the 8.375% percent bond whose maturity is December 10, 2018.

Requests for documents may be directed to D.F. King & Co., Inc. by telephone at (212) 269-5550 for banks and brokers or at (800) 859-8508 for all others, or in writing at 48 Wall Street, 22nd Floor, New York, New York 10005.

Petróleo Brasileiro S.A. – www.petrobras.com.br

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