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S&P cuts its outlook on Petrobras' (NYSE:PBR) BBB- credit rating to negative from stable, and lowered its stand-alone credit profile - which does not take into account government support - to B+ from BB.
- "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 writes, adding that it expects cash flows could deteriorate further.
- The plunge in the real, which has dropped 15% YTD, also is likely to have an additional negative impact, S&P says.