PETROBRAS: Moody's Upgrades Rating To Ba3, Changes Outlook To Stable

(RTTNews) - Moody's Investors Service (Moody's) upgraded all Petrobras ratings, including the company's senior unsecured debt and corporate family rating, to Ba3 from B1. The outlook changed from positive to stable.

According to the credit risk agency, the rating upgrade reflects Petrobras' material liquidity improvement, declining debt leverage, solid management discipline and strengthened corporate governance.

Moody's warns that there is still uncertainty around the SEC and DoJ bribery investigations about Petrobras and the resulting consequences for the company, but adds that the chances of Petrobras receiving a penalty big enough to hamper its liquidity position has declined.

"Since Lava Jato's investigations started in early 2014, the company improved its corporate governance and managed to settle with 21 out of 27 individual investors on legal disputes related to corruption and bribery investigations. Moreover, solid operating result in the last couple of years, despite low oil prices, increases cash flow visibility in the medium term, which reduces the risk that the company's credit profile will be significantly negatively affected by fines," Moody' said.

Moody's also raised Petrobras' baseline credit assessment (BCA) to B1 from B2 and changed the outlook to stable from positive.