Moody’s revises Petrobras rating maintaining Investment Grade
Petrobras informs that Moody’s rating agency has announced a revision of Petrobras’ global foreign currency and local currency debt ratings to Baa2 from Baa1 with a negative outlook, maintaining Investment Grade.
This revision, according to Moody’s, reflects high financial leverage and the agency expectation that it is only likely to decline significantly after 2016, contrary to the original agency expectations.
In Moody´s point of view, while Petrobras has been relatively successful in executing on its investments program and on its production targets, the increase of indebtedness as a consequence of real depreciation, losses on downstream segment related to the gap between international and domestic prices and the increase of funding needs, are factors that influence the evaluation.
In addition, in accordance with the agency, the lowest international oil prices, if maintained at long term, could be beneficial to the downstream segment, but they will affect negatively the upstream operations. Regarding the Company´s investments, Moody´s believes that, even if it has a reduction in 2015, it would not be sufficient for an accelerate indebtedness reduction in a real depreciation environment. At this environment, according to the agency, the deleveraging would occur slower than initially anticipated.
According to Moody´s, Petrobras’ Baa2 rating is supported by its large-scale reserve base and dominance in the Brazilian oil industry with a leading position, pre-salt significant discoveries, growing production and technological expertise. Petrobras´ rating also considers the extraordinary Federal Government support in a stressful scen