Fitch rates Petroperu bond BBB+

Fitch Ratings said it expects to assign a BBB+ long-term rating to Petroleos del Peru SA - Petroperu's proposed senior unsecured bond of up to $2 billion.

The proceeds will be used to finance the expansion of its Talara refinery, Fitch said.

Petroperu's ratings reflect its ownership by the Peruvian government, the company's strong strategic ties with the state and its strategic importance to maintaining the country's energy supply, the agency said.

As a state-owned company, Petroperu's foreign-currency issuer default rating is strongly linked with the credit profile of the Peruvian sovereign, Fitch explained.

The government support has been evidenced by multiple recent actions, including decrees promulgated to transfer all the company's pension liabilities to the state, recover the value-added tax for the company's operations in the Amazonian region and inject about $315 million of additional capital for the Talara expansion, the agency said.

Petroperu's ratings reflect its close linkage with Peru due to the government's control of the company and its strategic importance to the country as its largest hydrocarbon company and the strategic location of the company's refineries, Fitch said.

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