RIO DE JANEIRO - Credit rating agency Moody's has downgraded the long-term debt rating of Brazil's state-run energy giant Petrobras, citing concern that the firm is carrying high levels of debt.
Moody's said it trimmed the rating on the company's long-term debt from the current A3 to Baa1, or debt with "some speculative characteristics."
The move came a day after Moody's lowered the outlook for Brazil's sovereign debt rating because of deepening strains in the economy and the prospects of a long period of low growth.
Brazil is closely watched as one of the world's key emerging economies, but Moody's downgraded the outlook for Brazilian government debt, rated Baa2, from positive to stable.
The agency maintained the Baa2 notation but said it could lower the outlook to negative, or even downgrade the rating, if Brazilian growth is forecast to fall to less than 3.0 percent after 2014.
On Petrobras (IW 1000/21), Moody's senior vice president said in a statement that Petrobras' leverage was expected to "be at nearly peak levels in 2013 and 2014, significantly higher than those of its industry peers and only likely to decline in 2015 and beyond".
"Successful execution on its ambitious capital program and delivery on aggressive production targets will be key to reducing leverage in the next few years and to stabilizing the rating outlook," he added.
In the second quarter of this year, Petrobras had net income of $2.7 billion, but it also had a net debt of $36 billion.
The company's strategic plan for 2013 to 2017 calls for sales of assets totaling $9.9 billion and investment of $236.7 billion.
Copyright Agence France-Presse, 2013
