S&P downgrades Odebrecht Oleo

Standard & Poor’s said it lowered the corporate credit and issue-level ratings on Odebrecht Oleo e Gas SA to B from BB-, along with its stand-alone credit profile to B- from B+.

The agency also said t placed the ratings on CreditWatch with negative implications.

The downgrades reflect an expectation for weaker credit metrics in the next three years due to lower-than-expected dividends from its operating subsidiaries as Petrobras terminated its charter- and service-agreements with the ODN Tay IV drilling rig, S&P said.

Even though Odebrecht Oleo is already exploring replacement charter agreements, the agency said it does not expect top-level distributions from the subsidiaries, the agency said.

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