Check Out Petrobras' New Loan

Brazilian energy firm Petroleo Brasileiro Petrobras SA (ADR) PBR has entered into a deal with China Development Bank ("CDB") for financing worth $3.5 billion. Following the announcement, Petrobras ADR rose almost 6% on the NYSE.  

Petrobras has been hit hard after it entangled itself in a multibillion-dollar money laundering scandal last year. Owing to this, it was difficult for the company to raise money from the bond market after the rating agency Moody's Investors Service cut Petrobras debt to junk grade.

Hence, for raising money – to carry on costly upstream operations − the company decided to sell assets as part of its $13.7 billion divestment program. Recently, Petrobras declared the sale of its Argentina assets.

Amid all these unfavorable events, a ray of hope could be seen after Petrobras got the loan assurance from CDB. The details of the accord have not been provided by Petrobras yet. But the agreement − which is portion of the cooperation deal between CDB and Petrobras – will likely be executed this year and in 2016.

Headquartered in Rio de Janeiro, Petrobras' activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks, as well as refining, processing, trading and transportation of oil and oil products, natural gas and other fluid hydrocarbons. to The firm also has other energy-related activities.

The company currently carries a Zacks Rank #5 (Strong Sell).

Some better-ranked players in the energy sector are Valero Energy Corp. VLO, Western Refining Inc. WNR and Ferrellgas Partners LP FGP. All the stocks sport a Zacks Rank #1 (Strong Buy).