S&P cuts Petrotrin debt to BB

Standard & Poor's said it lowered its long-term corporate credit and senior unsecured debt ratings on Petroleum Co. of Trinidad & Tobago Ltd. (Petrotrin) to BB from BB+.

The outlook is stable.

S&P said the downgrade stems from its expectation that Petrotrin's credit metrics will weaken further in the next 12 to 18 months due the recent revision of our hydrocarbon price assumptions. The agency no longer expects the company's debt to EBITDA to return to less than 5 times within the next few years.

Funds from operations to debt will remain at levels of less than 12%.

Although it expects that Petrotrin will rollover its short-term loans – thanks to its sound relationship with banks due to its government ownership – S&P believes liquidity is very tight to cover its capital expenditures (capex) needs, which could hamper expected production increases.

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