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Fitch rates Petrobras notes BBB
Fitch Ratings said it assigned a BBB rating to Petrobras International Finance Co.'s proposed senior global notes due in 2015, 2017 and a BBB rating to its proposed add-on of senior notes in a reopening of its 5.375% notes due in 2021 and of its 6.750% notes due in 2041.
The total amount of the issuances will be about $6 billion. The notes will be unconditionally and irrevocably guaranteed by Petroleo Brasileiro SA (BBB/stable).
Proceeds will be used to fund Petrobras' capital expenditure program and for general corporate purposes.
Petrobras' 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, according to the agency.
The rating also incorporates Petrobras' sustained production growth track record, as well as significant growth prospects for the company's reserves, after substantial discoveries in recent years, the agency noted.
The ratings are tempered by Petrobras' exposure to local political interference and its significant medium-term capital-investment program, along with vulnerability to fluctuations in international commodity prices, currency risk and domestic market revenue concentration, the agency said.
Petrobras' ample liquidity, its proven access to the financial markets and the expectation that credit metrics will recover once the company significantly monetizes its large oil reserve base somewhat mitigates these risks, Fitch said.
The company has a total adjusted debt-to-EBITDAR ratio of 3.1 times, net debt-to-EBITDA ratio of 1.3x and EBITDAR-to-interest and rental expense of 3.6x.
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