S&P ups Electrobras, Petrobras

Standard & Poor's said it raised its ratings on Eletrobras-Centrais Eletricas Brasileiras SA and Petroleo Brasileiro SA - Petrobras, following a similar action on the sovereign ratings on the Federative Republic of Brazil.

The agency said it raised the foreign currency corporate credit rating on Eletrobras to BBB from BBB- and raised the local currency rating to A- from BBB+. It also raised the global scale corporate credit ratings on Petrobras to BBB from BBB-. The outlooks are stable.

S&P said the upgrades reflect the sovereign upgrade of Brazil.

"Because we view Eletrobras' likelihood of extraordinary government support as almost certain, we equalize the ratings on the company with those on the sovereign," said S&P credit analyst Milena Zaniboni in a news release. "Similarly, we view Petrobras' likelihood of extraordinary government support as very high, which, under our criteria, leads us to revise the ratings on the company as a function of the foreign currency sovereign upgrade."

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