Moody's rates Petrobras Energia note Baa2

Moody's Investors Service said it assigned a Baa2 foreign-currency bond rating to Petrobras Energia SA's proposed $300 million series S senior unsecured notes.

The outlook is stable.

The agency said the Baa2 rating on the notes is based solely on credit support provided by Petroleo Brasileiro SA, which is the majority 67.2% holder of Petrobras Energia. In the event of non-payment by the issuer, Petrobras is obligated to purchase the noteholders' rights to receive any payments due on the notes.

The Baa2 foreign-currency bond rating and Petrobras' A2 global local-currency rating reflect the company's status as a government-related issuer, the low likelihood that Petrobras would be subject to a general debt moratorium in Brazil, Petrobras' dominant position in Brazil's petroleum sector, its sizable hydrocarbon reserves and strong growth profile in oil and natural gas production, the benefits of upstream and downstream integration and its moderate financial leverage, Moody's said.

At the same time, Petrobras has embarked on an aggressive capital expansion program that could lead to leverage increases in the medium-term, it remains subject to inflation and devaluation pressures and a large foreign-currency debt component and downstream operations are affected by delays in realizing import parity pricing, among other factors, the agency noted.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.