Moody's improves Petrobras' rating, changes outlook to positive

Moody's rating agency upgraded Petrobras' credit rating from B2 to B1 on Monday (April 10) and changed its outlook to positive, indicating the rating could be raised again any time. Despite the upward revision, Petrobras is four levels below investment grade.

Investment grade means certainty that a country or company is not at risk of default. In February 2015, in the aftermath of the “Car Wash” corruption scandal, Petrobras lost its status with Moody's. In February 2016, the oil company was again downgraded to the lowest speculative level, but the rating was raised one level to B2 in October.

Monday's decision comes less than a month after Moody's improved the outlook for Brazil's public debt. The agency kept Brazil two levels below investment grade, but upgraded the outlook for the country's rating from negative to stable, which means Brazil's debt rating is no longer subject to sudden downgrades.

In February, Standard & Poor's upgraded Petrobras's rating from B+ to BB-. With the change, the state-owned company went up from four to three levels below investment grade. On that occasion, the agency cited Petrobras's improved management and increased liquidity (cash availability).

Translated by Mayra Borges