Moody's may cut Petroplus

Moody's Investors Service said it placed under review for downgrade the B1 corporate family and probability of default ratings of Petroplus Holdings AG and the B2 (LGD5, 80%) ratings assigned to the $1.6 billion of senior bonds issued by Petroplus Finance Ltd.

The review of the ratings reflects the concern that as a result of the extended weakness in the European refining markets, Petroplus is managing its operations and liquidity with a reduced level of financial flexibility, the agency said.

S&P said it expects no material improvement in market conditions in the near term. In the first half of 2011, the European refining margins remain relatively depressed, as supply remains affected by the lagging overcapacity while growth in demand is subdued due to a sluggish economic recovery.

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