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Moody's slashes Petrobras credit rating

25th February 2015

Petrobras has had its Moody’s credit rating slashed for the second time in a month

Petrobras has had its Moody’s credit rating slashed for the second time in a month
The value in Petrobras equity and bonds has plummet since November when Brazilian police arrested 20 people in connection with receiving bribes in exchange for lucrative construction contracts

Moody's Investors Service today downgraded all ratings for Petrobras (including debts rated based on Petrobras' guarantee), including a downgrade of the company's senior unsecured debt to Ba2 from Baa3, and assigned a Ba2 Corporate Family Rating (CFR) to the company.

Moody's also lowered the company's Baseline Credit Assessment (BCA) to b2 from ba2.

These rating actions reflect increasing concern about corruption investigations and liquidity pressures that might result from delays in delivering audited financial statements, as well as Moody's expectation that the company will be challenged to make meaningful reduction in its very high debt burden over the next several years.

The ratings remain on review for downgrade.

The value in Petrobras equity and bonds has plummet since November when Brazilian police arrested 20 people in connection with receiving bribes in exchange for lucrative construction contracts.

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