Petrobras debt rating downgraded to junk status

Brazil’s national oil company saw its debt rating cut to junk status 10 September by Standard & Poors

The oil price, high debt and a multi-billion dollar corruption scandal continue to weigh on the company. S&P’s downgrade came after Moody’s, another of the major rating firms, cut Petrobras’ debt to junk in February this year. It is a major blow to a company that not long ago wore its investment-grade credit rating as a badge of honour. The downgrades could make it more difficult and costly for Petrobras to raise debt. Investors in the company’s landmark 100-year bond released in June have already seen the value of that bond fall by 15%. The deteriorating conditions surrounding the company will also likely force it once again to scale back its production ambitions just months after relea