S&P rates Petroperu notes BBB-

S&P said it affirmed the BBB- long-term corporate credit rating on Petroleos del Peru Petroperu SA (Petroperu).

The agency also said it assigned a BBB- rating on its proposed $2 billion senior unsecured notes that mature in 15- or 30-years.

The agency also said it kept the company's B+ stand-alone credit profile unchanged.

The outlook remains stable.

The proceeds will be used to fund the remaining cost of the Talara refinery's upgrade.

Following the transaction, adjusted leverage will remain in line with expectations with a debt-to-EBITDA ratio of about 8x, S&P said.

The agency said it expects improvements will likely be completed by the end of 2020. S&P said it doesn't envision de-leveraging in the near or medium term, or until the completion of Talara's upgrade.

But S&P said it believes the new issuance will help extend the maturity profile versus the existent concentration in the short term, which is a credit positive.

The ratings also consider that there is a very high likelihood that the company's owner, the Republic of Peru, would provide timely and sufficient extraordinary support to the company in the event of financial distress, the agency said.

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