Moody’s downgrades Petrotrin, debt to Ba3

Moody's Investors Service said it downgraded the corporate family rating and the senior unsecured debt ratings for Petroleum Co. of Trinidad & Tobago (Petrotrin) to Ba3 from Ba1.

At the same time, the agency lowered Petrotrin's baseline credit assessment (BCA) to b3 from b1.

The ratings remain on review for downgrade, in line with the rating review of the government of Trinidad and Tobago (Baa2 under review), sole owner of Petrotrin.

"The downgrade of Petrotrin's ratings to Ba3 from Ba1 and the lowering of its baseline credit assessment to b3 from b1 reflect the company's weak liquidity and high refinancing risk, triggered by persistent negative operating performance in the last couple of years, and our expectation that this trend will continue given current market conditions," Moody’s vice president, senior credit officer Nymia Almeida said in a news release.

"Petrotrin faced operating challenges which triggered significant losses in 2015, a year in which most refineries in the region posted higher crack margins due to low oil prices. In this context, and assuming that international oil prices will recover and compress the company's operating margins further, and absent major investments that boost efficiency, we believe that the company's cash generation will remain weak for the foreseeable future, increasing its reliance on external sources of funding."

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