Fitch cuts Petrobras

Fitch Ratings said it affirmed the BBB foreign-currency issuer default rating, AAA(bra) national long-term rating and BBB outstanding debt rating for Petroleo Brasileiro SA

The outlook is stable.

These rating actions follow Fitch's recent upgrade of Brazil's long-term foreign- and local-currency issuer default ratings to BBB from BBB-, the agency said.

Fitch downgraded the local-currency issuer default rating of Petrobras to BBB from BBB+, reflecting higher expected leverage following the extensive capital expenditure program and the rising challenges of the pre-salt projects.

The rating actions also reflect the increasing linkage between Petrobras' ratings and that of the federal government of Brazil, the agency added.

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