Moody’s gives Ba3 to Petrobras notes

Moody's Investors Service said it assigned a Ba3 rating to Petrobras Global Finance BV's proposed new global notes, which will be unconditionally guaranteed by Petroleo Brasileiro SA (Petrobras, Ba3 stable).

The outlook is stable.

Moody’s said the Ba3 rating on the proposed notes is based on the rating of Petrobras.

The proposed notes are senior unsecured and pari passu with Petrobras Global Finance’s and Petrobras' other senior foreign currency debt.

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

Petrobras' b1 baseline credit assessment, which indicates the company's standalone credit strength, and its Ba3 global scale rating reflect its high debt levels and business plan execution risk and, to a lesser extent, potential negative impact from fines related to the Lava Jato investigation, the agency explained.

The ratings also reflect the company's sizeable reserves at 9,592 Mboe as of Dec. 31, 2016 (equivalent to over 10 years of life), its solid technological offshore expertise, and potential for continued growth in production over the medium and long-term, Moody’s added.

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