Moody’s: Petrobras Global Finance notes B2

Moody's Investors Service said it assigned a B2 rating to Petrobras Global Finance BV's proposed global notes, which will be unconditionally guaranteed by Petroleo Brasileiro SA (Petrobras, B2 stable).

The B2 rating on the proposed notes is based on the rating of Petrobras. The notes are senior unsecured and pari passu with Petrobras Global Finance and Petrobras' other senior foreign currency debt.

Proceeds will be used for debt refinancing and other general corporate purposes.

The outlook is stable.

“Petrobras' b3 BCA, which indicates Moody's view of the company's standalone credit strength, considers its high financial leverage, low to negative free cash flow, weak liquidity, local currency volatility risk and operating challenges in a difficult industry and economic environment,” Moody’s said in a news release.

“Consolidated free cash flow will remain under pressure in the foreseeable future as its upstream business suffers from low oil prices and downstream operations are hurt by low demand, high competition and local currency volatility, at the same time that the company's new pricing policy for fuel is tested.

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