Fitch assigns BB to Petrobras debt

Fitch Ratings said it assigned an expected rating of BB(EXP) to Petrobras (Petroleo Brasileiro SA)'s proposed debt issuance due 2025 and 2028.

The notes will be issued by Petrobras Global Finance BV and will be unconditionally and irrevocably guaranteed by Petrobras.

The company expects to use the proceeds to refinance existing debt and for general corporate purposes.

Petrobras is issuing the notes in conjunction with exchange offers for either new notes or cash for six separate notes with an aggregate outstanding principal amount of about $15.1 billion.

“Petrobras' ratings continue to reflect its close linkage with the sovereign rating of Brazil due to the government's control of the company and its strategic importance to Brazil as its near-monopoly supplier of liquid fuels,” Fitch said in a news release.

“By law, the federal government must hold at least a majority of Petrobras' voting stock. The government currently owns 60.4% of Petrobras' voting rights, directly and indirectly, and has an overall economic stake in the company of 45.3%.”

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