S&P ups PDVSA Finance

Standard & Poor's said it raised its rating on PDVSA Finance Ltd.'s outstanding notes to B+ from B.

The rating action follows the recent elevation of the local and foreign currency ratings of the Bolivarian Republic of Venezuela to B from B- and the subsequent upgrade of the corporate credit of Petroleos de Venezuela SA (PDVSA) to B from B-.

On Aug. 5, S&P downgraded the PDVSA Finance transaction to B from B+/Watch negative after a tender and consent solicitation by PDVSA. The downgrade reflected changes that were made to the structure of the transaction that, in S&P's view, diminished the credit protection afforded to investors. The differential between the rating on the PDVSA Finance notes and the issuer credit rating of PDVSA was thereby narrowed to one notch from the two notches that existed before the successful completion of the tender offer.

The current upgrade of the PDVSA Finance notes maintains this one-notch differential.

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