S&P upgrades Petrobras

S&P said it raised the stand-alone credit profile on Petrobras (Petroleo Brasileiro SA) to BB from BB-.

The agency also said it affirmed the global scale ratings on the company at BB- and the Brazilian national scale rating at brAAA.

S&P said the company has maintained a sound operating performance, driven by growing production, solid portfolio management and effective governance standards.

These factors allowed the company to continue reducing debt and improving credit metrics, the agency said.

S&P said it forecasts an adjusted debt-to-EBITDA ratio on the company will be about 3x to 3.5x over the next two years.

These metrics should provide the company with some cushion to handle potential commodity price volatility or any contingent liability that could arise, the agency said.

The stable outlook considers that the sovereign rating on Brazil caps the ratings on Petrobras, S&P said.

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