Fitch cuts PetroAmazonas

Fitch Ratings said it downgraded the senior unsecured notes issued by Empresa Publica de Exploracion y Explotacion de Hidrocarburos Petroamazonas EP (PetroAmazonas) due in November to CC/RR4 from CCC/RR4. The notes have a total of about $300 million outstanding. The rating action follows Fitch's recent downgrade of the Republic of Ecuador to CC from CCC.

“PetroAmazonas' senior unsecured notes rating reflects those of Republic of Ecuador as a guarantor. The notes are fully covered by a sovereign guarantee, which constitutes a general, direct, unsecured, unsubordinated and unconditional obligation of the sovereign. The guarantee is backed by the full faith and credit of the Republic of Ecuador and ranks equally in terms of priority with other sovereign debt. This linkage reflects PetroAmazonas' importance to the government of Ecuador as the main supplier of the country's energy supply and a large contributor of U.S. dollar-linked revenues,” Fitch said in a press release.

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