SÃO PAULO--Moody's Investors Service said Monday that it
confirmed all ratings for Brazilian state-run energy giant Petróleo
Brasileiro S.A. with a stable outlook for the company and its
guaranteed debt.
The announcement concludes Moody's review for downgrade. In
February, the ratings firm downgraded Petrobras's debt, cutting the
company's rating to Ba2, two steps into junk, amid a corruption
investigation in Brazil.
Monday's rating affirmation follows the release of Petrobras's
first audited financial statements in more than eight months. Last
week, Petrobras said it wrote off $2.1 billion due to the alleged
corruption scandal. The oil giant also booked an impairment charge
of $14.8 billion, determining that assets were overvalued on its
balance sheet.
"The confirmation of Petrobras" rating reflects Moody's belief
that the provision of audited financial statements eliminates the
near term prospect of debt acceleration resulting from violation of
covenants in indentures and loan agreements," Moody's said in a
statement Monday.
Petrobras's earnings release came days before an April 30
deadline that could have allowed Petrobras's bondholders to request
early repayment.
Moody's also said Monday that the company's ratings reflect
challenges related to the corruption investigation, which creates
management distractions that may hinder efforts to improve
operations as well as ongoing concerns about corporate governance
and the need to improve internal controls.
Petrobras shares and reputation have been hurt by allegations
that former executives at the oil company received bribes from
construction firms and service providers in exchange for
contracts.
The oil company has said it is a victim of the kickback bribery
scheme and said it has cooperated with authorities.
Moody's said Monday it expects Petrobras's financial performance
to decline in 2015 before beginning an improving trend as oil
prices slowly recover and management initiatives to improve
operations and sell assets begin to have a material effect.
Write to Luciana Magalhaes at luciana.magalhaes@dowjones.com
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