Story by The Wall Street Journal
Standard & Poor’s Ratings Services downgraded Brazil’s state-run oil firm Petroleo Brasilero SA to junk status Thursday, along with a slew of other state-run companies, following the downgrade to junk status of Brazil’s sovereign debt.
After downgrading Brazil’s sovereign debt into junk territory Wednesday, S&P loweredPetrobras’ ratings two notches, from BBB- to BB. Its outlook for Petrobras is negative. The ratings firm said the downgrade of Petrobras was triggered by its downgrade of Brazil’s currency.
The ratings agency also downgraded some 30 other Brazilian state companies, including electric utility Eletrobras.
The downgrade means two of the three major ratings firms classify Petrobras’ debt as junk and compounds the troubles facing the company as it tries to cut debt and sell billions of dollars’ worth of assets. Moody’s Investors Service downgraded Petrobras’ debt to junk in February.