S&P puts Petroleos de Venezuela on developing watch

Standard & Poor's said it placed Petroleos de Venezuela SA's B+ corporate credit rating on CreditWatch with developing implications following the upgrade of the long-term sovereign credit rating on the Bolivarian Republic of Venezuela to BB- from B+.

In addition to S&P's ongoing concerns regarding the company's ability to finance both sustaining capital expenditures and growth initiatives, the CreditWatch listing reflects the absence of timely financial and operating information.

To date, the ratings on Petroleos de Venezuela have reflected the sovereign rating on Venezuela, its lone shareholder. S&P said it believes that the creditworthiness of the company and Venezuela will likely remain tightly linked because of their ties of ownership and economic interests.

However, the continued absence of timely information could lead to a downward revision or the withdrawal of the issuer's corporate credit rating. Conversely, upon full review of adequate information that confirms the company's financial flexibility, its rating may be upgraded to BB- and once again equalized with that of Venezuela, the agency said.

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