Epstein Secrets

repay these bonds is actually lower; probably around USD14-I 5bn, while the funding gap to repay the '16s is lower than USD4bn. Even if we assume a Brent price of USD40/bbl, the cumulative funding gap to repay the '16s and '17s would still be manageable, at less than USD5bn and about USD I 5-16bn, re

nk debt maturities next year). We forecast a cash burn of USD10bn (mainly due to working capital uses) and USD10bn of asset sales in 2016, assuming Brent of USD50/bbl and USDBRL of 4.2. In 2017, we forecast a cash burn of USD6bn (stable working capital) and USD3bn of asset sales. Since the company wo

7 October 2015 Corporate Credit,Energy Petroleo Brasileiro S.A. We believe Petrobras has a very high chance of meeting its funding gap through 2017 without relying on direct government support We have revised o

the maturity of the debt, the more toxic this combination becomes. If we were to assume an EV of USD100bn for Petrobras in 2020 (4x EBITDA) with a Brent price of USD50/bbl and USDBRL of 4.7, the EV-implied recovery to unsecured debt (assuming no haircut to secured debt) would be about 55% if we assu

cess cash at the end of 2015 (assuming a minimum cash position of USD5bn), USD20.30bn of asset sales (hard to assume anything above UD30bn with the Brent price below USD55flabl) and up to USD60bn of bank debt rollovers. We believe the execution risk for the company's refinancing challenge beyond 2020

7 October 2015 Corporate Credit,Energy Petroleo Brasileiro S.A. loans to Petrobras are already close to the cap of 25% of regulatory capital imposed by Brazil's central bank. Perhaps the government could relax t

r do% .,,. . A. it, &mot Deaductv Sn Iron a odiatileetanideia as 0/Oaten& 2075 Because of Petrobras' high leverage (5.2x estimated for 2016 with Brent of USD50/bbl and USDBRL of 4.2), significant challenges to reduce its cash burn, large debt maturities (USD60bn due by 2019 and USD104bn due by 202

7 October 2015 Corporate Credit,Energy Petroleo Brasileiro S.A. The average yield of the bonds due beyond 2019 is currently around 10%, compared to an average yield of the bonds due between 2018 and 2019 of aro

, or USD1.7bn) but is not enough, in our view, to meaningfully reduce the company's cash burn (of about USD4.5bn per year with capex at USD19bn and Brent at USD50/bbl). Another fuel price increase might prove difficult to achieve in the near term due to political and economic constraints, in our view

7 October 2015 Corporate Credit,Energy Petroleo Brasileiro S.A. IFigure 2: Outstanding Petrobras bond issues covered by Deutsche Bank Maturity AiTr1tAl I (VS itsidy/S&P/Eiti;11 DF) Rec. Dote of MiK Mid Pima

happens to high-cost producers. In the case of Petrobras, we estimate that the marginal E&P capex has a marginal leverage impact of about 4.5x with Brent of USD40/bbl, 3.5x with Brent of USD45/bbl and 2.8x with Brent of USD50/bbl. These estimates are based on the cost of about USD5bn to fully deploy

7 October 2015 Corporate Credit,Energy Petroleo Brasileiro S.A. Figure 5: Leverage and Funding Gap - Forecasts by DB Credit Research 7017 Net EcirreA Forecast Avg. 2-yr Brent Price (MAW) 40 45 50 55 60 6

have about 25bn barrels of crude oil recoverable reserves in its pre-salt fields and estimated that they could be worth about USD6.6/boe while the Brent price was above USD90/bbl. Since Brazilian pre-salt reserves break even in the low 40s (USD/bbl), it is hard to imagine a large chunk of those sell

7 October 2015 Corporate Credit,Energy Petroleo Brasileiro S.A. antestments: why not sell al€ of non•core assets (rather than 49% stakes); and woukl pre-salt reserves be realty sokl at low valuations? A relativ

happens to high-cost producers. In the case of Petrobras, we estimate that the marginal E&P capex has a marginal leverage impact of about 4.5x with Brent of USD40/bbl, 3.5x with Brent of USD45/bbl and 2.8x with Brent of USD50/bbl. These estimates are based on the cost of about USD5bn to fully deploy

7 October 2015 Corporate Credit,Energy Petroleo Brasileiro S.A. Figure 5: Leverage and Funding Gap - Forecasts by DB Credit Research 7017 Net EcirreA Forecast Avg. 2-yr Brent Price (MAW) 40 45 50 55 60 6

r do% .,,. . A. it, &mot Deaductv Sn Iron a odiatileetanideia as 0/Oaten& 2075 Because of Petrobras' high leverage (5.2x estimated for 2016 with Brent of USD50/bbl and USDBRL of 4.2), significant challenges to reduce its cash burn, large debt maturities (USD60bn due by 2019 and USD104bn due by 202

7 October 2015 Corporate Credit,Energy Petroleo Brasileiro S.A. The average yield of the bonds due beyond 2019 is currently around 10%, compared to an average yield of the bonds due between 2018 and 2019 of aro

, or USD1.7bn) but is not enough, in our view, to meaningfully reduce the company's cash burn (of about USD4.5bn per year with capex at USD19bn and Brent at USD50/bbl). Another fuel price increase might prove difficult to achieve in the near term due to political and economic constraints, in our view

7 October 2015 Corporate Credit,Energy Petroleo Brasileiro S.A. IFigure 2: Outstanding Petrobras bond issues covered by Deutsche Bank Maturity AiTr1tAl I (VS itsidy/S&P/Eiti;11 DF) Rec. Dote of MiK Mid Pima

have about 25bn barrels of crude oil recoverable reserves in its pre-salt fields and estimated that they could be worth about USD6.6/boe while the Brent price was above USD90/bbl. Since Brazilian pre-salt reserves break even in the low 40s (USD/bbl), it is hard to imagine a large chunk of those sell

7 October 2015 Corporate Credit,Energy Petroleo Brasileiro S.A. antestments: why not sell al€ of non•core assets (rather than 49% stakes); and woukl pre-salt reserves be realty sokl at low valuations? A relativ