Brazil's Petrobras audited result may end chance of default -Moody's

martes 21 de abril de 2015 20:04 GYT
 

By Jeb Blount

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.   Continuación...