S&P rates Petrobras notes BBB-

Standard & Poor's said it assigned BBB- senior unsecured debt ratings to Petrobras International Finance Co.'s $2.5 billion in global notes due 2020 and $1.5 billion in global bonds due 2040. The issuer is a wholly owned subsidiary of Petróleo Brasileiro SA (BBB-/stable).

These issues will be used in part to extend the company's debt amortization profile, as they replace shorter and floating-rate existing debt instruments, and Petrobras plans to use part of them to strengthen its cash position.

The agency said the BBB- corporate credit rating reflects Petrobras' satisfactory business risk profile, characterized by the quality of its exploration and production and its dominant market position in all aspects of the Brazilian hydrocarbon industry, and its intermediate financial risk profile.

These positive factors are somewhat balanced by Petrobras' limited geographic diversification and aggressive capital expenditure program for 2009 through 2013, S&P said.

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