S&P upgrades Petrobras

Standard & Poor's said it raised the long-term corporate credit rating on Petroleo Brasileiro SA (Petrobras) to BBB from BBB- and removed the rating from CreditWatch, where it was placed with positive implications on April 30.

The agency also upgraded the rating on the bonds issued by Petrobras' wholly owned subsidiary Petrobras International Finance Co. (BBB/stable) to BBB from BBB- and removed it from CreditWatch positive.

The outlook is stable.

S&P said the upgrade reflects the improved operating environment in Petrobras' home country of Brazil and sound fundamentals for oil prices in the medium term.

Ratings on Petrobras are higher than those on the Federative Republic of Brazil (BBB-/stable/A-3; BBB+/stable/A-2), the company's controlling shareholder, reflecting Petrobras' business and financial risk profiles, the agency said.

The company is expected to keep an adjusted total debt-to-EBITDA ratio below 2 times during the next few years, the agency added.

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