Moody’s changes Petrobras outlook to positive

The rating agency Moody’s upgraded corporate debt rating for the Brazilian oil giant Petrobras from B2 to B1 and changed the outlook from stable to positive. 

According to Petrobras, Moody’s highlighted the continuous improvement of the company’s liquidity profile and financial metrics over the last quarters on its report, due to greater cost efficiency and the new fuel pricing policy, among other factors.

Those factors have also helped the company to maintain access to capital markets and refinance part of its debt; so far in 2017 the company has tendered approximately $6 billion in notes and issued $4 billion in new notes, which allowed it to reduce debt and extend its debt maturity profile.

The agency emphasized developments in the Brazilian regulatory environment, which facilitate greater returns in long-term investments. Additionally, Petrobras said the agency recognized the company’s management commitment to achieve the financial and operating targets set in the 2017-2021 Business and Management Plan.

Despite the material improvements, Moody’s said that Petrobras’ liquidity risk remains a concern. As of December 31, 2016, Petrobras’ maturing debt in 2017 and 2018 was $8.8 billion and $11.3 billion, respectively, for a total of $19 billion in the next 2 years.

Other threats to Petrobras’ liquidity, as well as to its operating and financial performance, include execution risk related to the 2017-21 business plan and potential delays in fully executing its asset sales plan. It is positive, however, that the company has managed to settle with 19 out of 27 individual investors on legal disputes related to the Car Wash investigation, somewhat reducing uncertainty about the amounts of additional settlements and fines, including the ones related to the U.S. Securities Exchange Commission (SEC)’s the U.S. Department of Justice (DoJ)’s investigations.

Finally, the agency reported that the positive outlook indicates that, in the next 18 months, if the company’s liquidity and overall credit risk continues to improve, further positive rating actions could occur.

Share this article

Follow Offshore Energy Today

Events>

<< Feb 2020 >>
MTWTFSS
27 28 29 30 31 1 2
3 4 5 6 7 8 9
10 11 12 13 14 15 16
17 18 19 20 21 22 23
24 25 26 27 28 29 1

Offshore Energy Exhibition and Conference (OEEC) 2020

Offshore Energy addresses the technical, operational and commercial challenges associated with future sector growth.

read more >

CERAWeek 2020

 Each year, CERA clients gathered for a few days in Houston…

read more >

Offshore Technology Conference (OTC) 2020

The Offshore Technology Conference (OTC) showcases leading-edge technology for offshore drilling, exploration…

read more >

OWI APAC 2020

Over the two-day conference, 30 expert speakers will share exclusive insight to help drive well work efficiencies through innovative…

read more >

Jobs>

Looking to fill a job opening?

By advertising your job here, on the homepage of OffshoreEnergyToday.com, you'll reach countless professionals in the sector. For more information, click below...

apply

Looking to fill a job opening?

By advertising your job here, on the homepage of OffshoreEnergyToday.com, you'll reach countless professionals in the sector. For more information, click below...

apply