Petroleos Brasileiros SA (Petrobras), Brazil's state-owned oil giant, is chugging along with it's $750 million oil-backed future flow transaction, scheduled to close in October.

While Petrobras has been a fair market issuer, this deal will mark the first-ever future-flow for the company. The deal is expected to have a wrap from triple-A guarantor. Citibank is structuring the deal and Salomon Smith Barney is the underwriter.

The spiked oil prices that began in late 1999 and early 2000 instigated an interest in issuance (See ASR 9/10/01 p.1). Moody's Investors Service and Standard and Poor's are rating the deal.

Analysts close to the deal said the Argentine contagion should not affect the future-flow, although spreads may be slightly wider as a result. "[Petrobras] doesn't need the money, they are just diversifying their accounts," said one of the analysts.

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