RIO DE JANEIRO, April 21 (Reuters) - Wednesday's expected release of audited fourth-quarter financial statements by Brazil's state-run oil company Petrobras will likely end the chance of forced early repayment of up to $110 billion of debt, Moody's investors' service said on Tuesday.
The release of the results, delayed by a massive contract-fixing, bribery and political kickback scandal, would also be positive for Brazil's sovereign-debt outlook, Moody's said. Brazil owns a controlling stake in Petroleo Brasileiro SA , as the company is formally known.
"The publication of the (Petrobras) financial statements should significantly decrease the likelihood of events with negative direct credit implications for the sovereign," Moody's analyst Mauro Leos and his colleagues wrote in a report.
Moody's stripped Petrobras of its investment-grade rating in February and put it on a negative watch for a possible further downgrade. Moody's cut Brazil's debt rating to negative from stable in September.
While Brazil is not required to pay Petrobras debt in the case of a default, failure to do so is considered unlikely by Moody's because of Petrobras' importance to the country's economy, the world's seventh largest.
A forced repayment of $110 billion of Petrobras debt would be equal to about 5 percent of Brazil's gross domestic product, Moody's said.
Petrobras contracts for more than $50 billion in bonds sold under U.S. law requires it to provide audited fourth-quarter results to investors. Failure to do so by the end of April leads to a 60-day period under which Petrobras can correct the default.
Failure to correct the default would allow bondholders to request immediate repayment of the debt, which would also trigger repayment of other bonds and loans.
Petrobras auditors PricewaterhouseCoopers in November declined to certify company accounts as a widening corruption scandal raised questions about the true value of Petrobras assets.
Petrobras, PricewaterhouseCoopers and securities regulators in Brazil and the United States have been working since then to find a way to properly account for the impact of corruption on the company's balance sheet.
Petrobras' board is scheduled to review and possibly vote on the delayed results on Wednesday and the company has said it expects to release the results after markets close in Sao Paulo and New York the same day.
Analyst estimates have suggested that Petrobras will take a 20 billion real ($6.6 billion) write-down as a result of corruption in the fourth-quarter statements.
$1 = 3.03 Brazilian reais Editing by Lisa Shumaker