Brazil: Petrobras debt treated as junk

Petroleo Brasileiro (Petrobras) is being treated like junk by derivatives traders as the most-leveraged major oil producer goes deeper into debt to finance a $237 billion (R2.4 trillion) spending spree to expand output and refining. The cost to protect the Brazilian firm’s debt for five years using credit default swaps has almost doubled this year to 280.11 basis points, the most among 20 integrated oil firms globally, according to data provider CMA. Fitch Group said the contracts implied a debt rating of BB+, one level below investment grade. – Bloomberg