Moody's drops Petroplus

Moody's Investors Service said it downgraded the probability of default and corporate family ratings of Petroplus Holdings AG by one-notch to B1, along with the senior unsecured ratings to B 2 on $1.6 billion of senior unsecured bonds issued by Petroplus Finance Ltd.

This concludes a review for possible downgrade that began in November.

The downgrade was prompted by a severe deterioration in the operating performance and cash flow generation of the group over the last six months, Moody's said.

Petroplus failed to generate any positive clean EBITDA over the period and free cash consumption is estimated to have exceeded $700 million, largely wiping out the estimated $280 to $300 million net proceeds from the rights issue placed by Petroplus in the third quarter of 2009, the agency said.

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