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Why one investor is actually bullish on Brazil's troubled state oil giant Petrobras

Brazil's state-owned oil company Petrobras has been linked to the country's endemic corruption in recent years. But for one investor, the simple numbers of investing in the firm win out.

Myles Bradshaw, head of global aggregate fixed income at Amundi, told CNBC that Petrobras' bond valuation was attractive. Currently, Brazilian 30-year paper yields roughly 5 percent, while a 5-year bond in Petrobras yields roughly 7.5 percent. Given that Petrobras is a majority state-owned company, both carry a similar amount of risk.

Bradshaw was positive about how the company was dealing with its liquidity, debt swaps and long-term issue, adding that in the future, Petrobras' break even oil price was in the low 50s.

But Jim McCaughan, CEO of Principal Global Investors, was more cautious, arguing that "it's not just the oil price," which could lead to negative views on the company. "Petrobras is tied into quite high cost of production" in comparison to U.S. shale producers, he said.

Bradshaw added that Petrobras "is a tool partly of public policy," and "when you're investing in Petrobras you're also investing in the Brazilian state."

The Brazilian national flag flies in front of the headquarters of state oil giant Petrobras, in Rio de Janeiro, Brazil.
Vanderlei Almeida | AFP | Getty Images
The Brazilian national flag flies in front of the headquarters of state oil giant Petrobras, in Rio de Janeiro, Brazil.

The ongoing political graft scandal faced by Latin America's largest economy continues to bubble away. Last week President Michel Temer survived a vote in Congress as to whether he should be tried for corruption. News broke Tuesday that Temer's lawyers had requested that the country's Supreme Court remove the chief prosecutor in the corruption investigation against him.

Bradshaw was positive about Latin America as a whole, with growth picking up following the collapse in commodity prices in the 00s. "Valuation, accompanied by the prospect of political change a steadying up of the commodity markets – you have to take a view on those (when investing in the continent,)" McCaughan added.

Petrobras is the subject of an extensive investigation known as Lava Jato (Car Wash), in which executives are suspected of accepting bribes to award contracts to construction firms at inflated prices.

With regards to bond buying as a whole, Jamie Dimon, JPMorgan Chase CEO, told CNBC Tuesday "I'm not going to call it a bubble but I personally wouldn't be buying a 10-year sovereign debt anywhere in the world."

This article was updated on August 14th 2017 to clarify Jim McCaughan's comment on Petrobras' cost of oil production.