Fitch rates Petroleos de Venezuela notes B+

Fitch Ratings said it assigned a B+ with recovery rating of RR4 to Petroleos de Venezuela SA's proposed $3 billion notes of which $1.3 billion have a 4.9% coupon due 2014, $1.3 billion have a 5% coupon due 2015 and $400 million have 5.125% coupon due 2016.

The company's other ratings include a foreign-currency issuer default rating of B+, local-currency issuer default rating of B+, $3 billion outstanding zero coupon notes due 2011 of B+ with recovery rating of RR4; $3 billion outstanding senior notes due 2017of B+ with recovery rating of RR4, $3 billion outstanding senior notes due 2027 of B+ with recovery rating of RR4, $1.5 billion outstanding senior notes due 2037 of B+ with recovery rating of RR4 and a long-term national-scale rating of AAA(ven), the agency said.

The outlook is stable.

The company's credit quality is inextricably linked to that of the government of Venezuela, Fitch said. The government has used PDVSA's balance sheet to nationalize electricity companies, as well as to acquire industrial companies.

The government took the additional step during 2008 of changing its charter to allow it to participate in any industry that could contribute to the social development of the country, including health care, education and agriculture, the agency said.

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