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Petrobras: Extremely Overvalued

Alan I should have included Fitch's press release for the rating change last November:

"Fitch Rates Petrobras' US$1B Note Issuance 'BBB-'

Fitch Ratings-Chicago-02 November 2007: Fitch Ratings has assigned a 'BBB-' rating to Petroleo Brasileiro S.A.'s (Petrobras) US$1 billion 5.875% senior, unsecured Global Notes due 2018 issued through its wholly owned subsidiary, Petrobras International Finance Company (PIFCo). PIFCo is unconditionally guaranteed by Petrobras. Proceeds will be used for general corporate purposes.
Petrobras' ratings are supported by substantial proved hydrocarbon reserves and increasing upstream output, recognized leadership in offshore exploration and production, a favorable international product price environment, successful corporate and industry restructuring during the past decade, a transition to more transparent financial standards, and dominant domestic market share. Petrobras' controlling shareholder is the Federative Republic of Brazil, whose long-term foreign currency Issuer Default Rating is 'BB+.'

These supportive credit factors are tempered by Petrobras' vulnerability to fluctuations in international commodity prices and its exposure to local political interference. They also take into consideration currency risk, domestic-market revenue concentration, and significant medium-term capital investment requirements linked to the company's ambitious 2008-2012 strategic plan.

Petrobras' financial profile remains strong, with solid credit-protection measures continuing to benefit from increased production and the global rise in hydrocarbon and product prices. The company reported an adjusted total debt-to-EBITDA ratio of 1.3 times (x) and an operating EBITDA-to-interest expense of 20.1x under U.S. GAAP for the last 12 months (LTM) ended June 30, 2007. The company's EBITDA for the LTM was $24.1 billion. Petrobras maintains strong liquidity in relation to short-term debt obligations. The company had total adjusted debt (including pension liabilities) of $32.3 billion as of the LTM, of which approximately 18% was classified as short term, and $9.3 billion of cash and marketable securities. Petrobras' management has indicated its preference to maintain a substantial cash balance going forward, partially debt funded, to minimize its exposure to international capital market volatility.
Petrobras is an integrated international oil and gas company engaged in the exploration, development and production of hydrocarbons and in the refining, marketing, transportation and distribution of oil and a wide range of petroleum products, petroleum derivatives, petrochemicals and liquid petroleum gas. Petrobras is also an integrated power company with operations in electric power generation, transmission and distribution. By law, the federal government must hold at least a majority of Petrobras' voting stock."

Petrobras: Extremely Overvalued

"The only rating firm with intact credibility is Fitch, which historically rated Brazil's currency and PBR debt as marginal BB junk below investment grade."

The issue of Fitch upgrading Brazil to Investment Grade(BBB-) last week has been mentioned by Retdinvestr earlier.

The fact that Fitch upgraded Petrobras to Investment Grade(BBB-) on November 2 2007 seems to have gone unnoticed by the mysterious Alan von Altendorf.

Alan is it you CV posted on the CWSX website as "Chief Scientist" or do all the other people in your organisation have no names?

Also as you have no other articles noted in your bio, on your website or even through a search of Texas A&M's library and the web in general, have you written anything else?

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