Fitch rates Petrobras notes BBB

Fitch Ratings said it assigned a BBB rating to Petroleo Brasileiro SA's proposed €1.3 billion, €700 million and £450 million senior global notes. They will be due in 2019, 2023 and 2029, respectively.

Fitch also assigned a BBB foreign-currency issuer default rating.

The outlook is stable.

The notes will be issued through Petrobras' wholly owned subsidiary, Petrobras Global Finance BV, and will be unconditionally and irrevocably guaranteed by Petrobras.

Proceeds will be used to fund the company's 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 ratings are tempered by the company's aggressive capex program, exposure to local political interference, and vulnerability to fluctuations in international commodity prices, currency risk and domestic market revenue concentration, the agency said.

Fitch said Petrobras will also face challenges in achieving production growth targets while maintaining all of its stated credit metrics, including a net debt-to-EBITDA ratio of 2.5x.

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