The questions
1. World economic growth remains slow. Has your company taken particular financial measures as a precaution against a prolonged downturn? What are they?
2. Most corporates finance themselves with a combination of loans, bonds and commercial paper. How do you decide on the mix that’s right for your company?
3. Many banks use credit derivatives to transfer their lending risk. How do you feel about banks doing this with your loans?
4. Corporate treasurers are being encouraged to place spare cash in money market funds rather than bank deposits. What is your view of this trend?
5. Has the overall service you get from banks improved, got worse or stayed the same over the past 12 months? What kind of further service improvements would you like to see?
1. Some aspects of our strategic plan were reviewed to avoid future financial exposure to market volatility. Petrobras has adjusted its plans to be able to deal with changes in GDP downturns, FX rate overshooting and long-term funding instability.
2. We decide our mix based on cost, duration and our interest in diversifying the investor base through access to the capital markets. Our objectives are to lengthen our debt maturity profile and diversify our funding sources.
3. Banks that are transferring our credit risk are competing with us in our deals with other institutions. It would be more efficient if they would keep our risk.
4. The way we are paying attention to liquidity, risk and return, we do not need to place our spare cash in money market funds.
5. In our relationship with banks in Brazil, they have improved their services substantially.