Petrobras Offshore Spending Spree Fuels Rally in Oil-Rig Bonds

Constellation Oil Services Holding SA’s bondholders are reaping a windfall due to increased demand for the company’s offshore rigs from Petroleo Brasileiro SA, a sharp recovery for a business that emerged from a debt restructuring less than two years ago.

While the group of holders is small, and liquidity is thin, notes due in 2026 have jumped roughly 25 cents since November 2022, handing investors a total return of around 45%, compared with an average of 16% for emerging-market corporates during that period, according to a Bloomberg gauge.

Constellation emerged from bankruptcy protection in Brazil in June ...