Standard & Poor's Ratings Services revised its outlooks on both companies to negative from stable. The outlook revisions follow an identical outlook revision on the sovereign ratings on the Federative Republic of Brazil. At the same time, we affirmed our 'BBB' ratings on Petrobras and 'BBB' foreign currency
We base our view of a "very high" likelihood of government support to Petrobras on the following factors:Petrobras' "very important" role as both Brazil's main oil producer, a key sector with high growth prospects, and its main fuel distributor, with a correlative effect on inflation; and
The company's "very strong" link to the government, which owns 50.2% of Petrobras' voting shares (65.4% when we account for sovereign-related entities like the Brazilian Development Bank, the Brazilian sovereign wealth fund, and other government entities' support for the company's investment program.).