S&P lowers ratings of Petrobras and other 30 companies

One day after downgrading Brazil's credit rating, Standard & Poor's (S&P) has lowered Petrobras' investment ratings. The company was downgraded from BBB-, the last rating of countries considered safe to invest, to BB. The firm's global scale rating is even lower than the country's, which was downgraded from BBB- to BB+.

In addition to Petrobras, S&P downgraded 30 companies, such as Eletrobras and Itaipu. "The downgrade of Eletrobras, Itaipu, and Petrobras is in line with our criteria for government-related entities," explained the rating agency in a press release.

Petrobras released a note about the downgrade, stating that their financing do not have clauses linked to the rating of risk classification agencies and that S&P evaluation will not cause changes in existing contracts.

"Petrobras has adopted several internal measures to improve its production and management processes in order to reduce costs and thereby improve our competitiveness. By 2019, the company plans to reduce operational costs, saving about $12 billion. Among the measures adopted, we highlight reducing the amount of investment and prioritizing the exploration and production segment," the company announced.

The S&P chose not to downgrade some Brazilian companies credit rating and maintained the stable outlook on six companies. It also affirmed the ratings and maintained the negative outlook on three entities. Finally, it revised the outlook on 14 entities to negative and placed ratings on Creditwatch with negative implications on six entities.

The companies downgraded by S&P are the following: Petrobras; Eletrobras; Itaipu Binacional; AmBev; Samarco Mineração; Votorantim Participation; Votorantim Industrial; Votorantim Cement; São Paulo Gas Company; Energy companies of Ceará, Bahia, Rio Grande do Norte and Pernambuco; Elektro; Taesa; Neoenergia; AB Concessões; Rodovia das Colinas; Triângulo do Sol Auto-Estradas; Arteris; Autopista Planalto Sul; CCR; Concessionária da Rodovia Presidente Dutra; Autoban; Rodonorte; Ecorodovias; Ecovias dos Imigrantes; Santos Brasil Participações; Globo Comunicação; Multiplan Empreendimentos and Ultrapar Participações.

* Vladimir Platonow contributed to this article.

Translated by Amarílis Anchieta