Petrobras announced that the risk classification agency, Standard & Poor´s Ratings Services has increased the currency debt rating of Petrobras and its wholly owned subsidiary PfiCo (Petrobras International Finance Co.) from BBB- to BBB with a stable outlook. The Company had been placed on positive CreditWatch since April 30 2008, when Standard & Poor's increased Brazil's sovereign rating to investment grade.
This increase reflects the improvement in Petrobras' operating environment in Brazil and the favorable outlook for oil prices over the medium term. These factors permit the generation of a cash flow compatible with the Company's substantial capital expenditures program. In addition the enhanced rating reflects the significant growth opportunities for the Company in the new Pre-Salt exploratory frontier region.
The classification granted to Petrobras is higher than that of the Federal Republic (currently BBB-), the Company's controlling shareholder which holds 55.7% of the voting capital. For Standard & Poor's, this factor is a reflection of Petrobras' business profile and financial risk, indicative of the Company's independent perspective and stability for the new rating as well as incorporating the agency's belief that corporate governance practices remain solid.
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