Fitch rates Petrobras debt BB

Fitch Ratings said it assigned an expected rating of BB(EXP) to Petroleo Brasileiro SA's proposed debt issuance due 2029.

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.

Fitch said Petrobras' ratings reflect Brazil's (BB/negative) very strong support incentives, which are the result of its strategic importance for the country. This is supported by Petrobras' leadership position in the Brazilian domestic energy market.

“The ratings also reflect the strong linkage between Petrobras and Brazil resulting from the Brazilian government's majority ownership and strong support track record,” the agency said in a news release.

“Petrobras' ratings are tempered by its relatively weak credit protection metrics and vulnerability to fluctuations in international commodity prices, currency risk and domestic market revenue concentration.”

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