Moody's upgrades Petrobras

Moody's Investors Service said it upgraded to A2 from Baa1 the ratings of four transactions of Brazil-based Petroleo Brasileiro SA (Petrobras) that benefit from political risk insurance coverage, including special trust 2001 P15 and special trust 2001 P32 floating-rate certificates due 2011, upgraded to A2 from Baa1, and Petrobras International Finance Co.'s 9.875% senior notes due 2008, 9.75% senior notes due 2011 and 9.125% senior notes due 2007, all upgraded to A2 from Baa1.

This rating action concludes the review initiated on July 12, 2005, when the ratings were placed on review for a possible upgrade following the upgrade of Petrobras' global local currency rating to A2 from Baa1.

Moody's said the ratings of all four transactions are based on the ability and willingness of Petrobras to make payments in Brazilian reais to investors for conversion into U.S. dollars under the terms of the transaction documents and the availability of 18 months of outside credit enhancement available to make interest payments during the period of an inconvertibility or transferability event.

The A2 ratings also take into account the ability and willingness of each provider of political risk insurance protection to make payment under their respective commitments, the agency said.

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