Fitch rates Petrobras notes BBB

Fitch Ratings said it assigned a BBB rating to Petroleo Brasileiro SA's (Petrobras) proposed $4 billion multitranche senior unsecured global notes of which $2.5 billion mature in 2020 and $1.5 billion in 2040. Coupons on these notes are 5.75% and 6.875%, respectively.

The notes are issued through its wholly owned subsidiary, Petrobras International Finance Co., and are guaranteed by Petrobras. Proceeds will be used to refinance the outstanding portion of the bridge loans the company borrowed earlier this year.

The ratings are supported by its leadership position in the Brazilian domestic energy market, its recognized expertise in offshore exploration and production and its strategic importance to Brazil, Fitch said.

These factors are tempered by vulnerability to fluctuations in international commodity prices, exposure to local political interference, currency risk, domestic market revenue concentration and significant medium-term capital-investment requirements, the agency said.

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