Moody’s downgrades risk rating and maintains Investment Grade

Petrobras announces that the credit rating agency Moody's has downgraded Petrobras' global foreign currency and local currency debt ratings from A3 to Baa1 with a negative outlook, maintaining Investment Grade and returning to the same level as the company was in June 2011.

This revision, according to Moody's, reflects financial leverage and the expectation of negative cash flow over the next few years due to the implementation of the company's robust investment program.

The agency expects a higher financial leverage, with peaks in 2013 and 2014, but tending to decline as of 2015, as the implementation of the investment plan is successful and production targets are met. In addition, the agency believes that the programs designed to control costs and enhance project management, implemented by CEO Graça Foster, will help contain investment increases and will lead to a rise in production.

Petrobras recognizes that its US$ 236.7 billion investment program as outlined in the 2013-2017 Business and Management Plan is robust and highlights its stronger governance with stricter project approval criteria. This can be seen as no new projects were included in the PNG 2012-2016 and PNG 2013-2017 portfolios. Petrobras has kept the level of its capital spending focusing on the completion of projects under implementation without changes in scope.

This Plan will allow the company to significantly increase oil and natural gas production by reaching 3.4 million barrels of oil equivalent per day (boed) in 2017 and 5.2 million boed in 2020.

Petrobras' current debt maturity profile is well distributed and balanced with future cash flow generation, and most of the debt raised this year has an average maturity equal to or higher than 7 years, compatible, therefore, with the maturity of the investment projects and consequent growth of the company's cash generation.
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