(Adds details, stand-alone credit profile)
RIO DE JANEIRO, March 23 (Reuters) - Ratings agency Standard and Poor’s said on Monday it affirmed its BBB- rating for Brazil’s state-run oil company Petrobras but revised its outlook to negative from stable, reflecting the challenges the company faces in funding plans to increase production.
At the same time, S&P said Petroleo Brasileiro SA, as the company is formally known, would be a junk-rated company, or below investment grade, if it were not for sovereign support. The so-called “stand-alone credit profile” was lowered further into junk territory, down to B+ from BB.
Petrobras has become ensnared in a bribery, money laundering and kickback scandal which has closed off access to capital markets at a time when the company is trying to increase production from giant offshore oil fields.
“The ongoing corruption investigations not only squeezed financing of Petrobras’ investment plan, but also weakened its main contractors’ creditworthiness and slowed the construction of the oil rigs to ramp-up production,” S&P said in a statement.
Reporting by Stephen Eisenhammer; Editing by Diane Craft