Brazil sees no need to capitalize Petrobras despite downgrade-sources
By Alonso Soto
BRASILIA Feb 25 (Reuters) - Brazil has no plans to capitalize Petrobras at the moment despite market fears the state-run oil company could need fresh capital after Moody's Investors Service stripped it of its investment grade credit rating, two government officials told Reuters on Wednesday.
Moody's cut Petrobras' rating by two notches late on Tuesday and kept the firm on review for further downgrade, citing concerns over an ongoing corruption scandal and liquidity pressures.
"We have no plans to capitalize Petrobras," said one of the officials, who asked for anonymity to speak freely. "The government is not planning to make any cash transfers to Petrobras."
The same official added that the government was worried that the Petrobras downgrade could end up having a contagion effect on Brazil's sovereign rating. (Additional reporting by Luciana Otoni; Editing by Chizu Nomiyama)
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