S&P cuts Odebrecht Oleo

Standard & Poor's said it lowered the corporate credit rating on Odebrecht Oleo e Gas SA to BB- from BB+.

At the same time, the agency lowered the issue-level rating on the company's perpetual bonds to BB- from BB+ and revised downward the standalone credit profile to b+ from bb.

The outlook is stable.

“Our ratings on OOG are based on its ability to meet financial obligations at the holding level thanks to dividend distributions coming from its operating subsidiaries," S&P credit analyst Candela Macchi said in a news release.

The downgrade on the company follows the revision on Petroleo Brasileiro SA - Petrobras' standalone credit profile, which in turn reflects deterioration in the quality of Odebrecht’s cash flows. Petrobras chartered all of the vessels owned by Odebrecht under long-term contracts with tenors that range between seven and 10 years.

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