S&P ups Petrobras, notes to BB-

S&P said it raised its global scale ratings on Petroleo Brasileiro SA – Petrobras to BB- from B+, including the corporate credit rating and the ratings on the senior unsecured notes issued through the company's financing vehicles (Petrobras International Finance Co. and Petrobras Global Finance BV).

The issue-level ratings are the same as corporate credit rating, incorporating the holding operating nature and businesses diversification, which in the agency’s view mitigate potential structural subordination to priority liabilities at the subsidiaries' level and secured debt that accounts for less than 10% of total debt, the agency explained.

S&P also raised the company's stand-alone credit profile to bb- from b- and upgraded its Brazilian national scale corporate credit rating to brA from brBBB-.

The outlook is now stable.

S&P said the upgrade reflects its view that Petrobras' liquidity has improved significantly amid an improving governance and ongoing liability management, which allowed the company to ease refinancing pressures and to maintain a solid cash position.

The capex cuts and the implementation of the new pricing policy have also contributed to improved cash flow generation prospects and a more balanced capital structure.

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