Fitch rates Rio Oil Finance notes BB-

Fitch Ratings said it affirmed the BB- ratings of the series 2014 notes issued by Rio Oil Finance Trust and assigned BB- expected ratings to the proposed $600 million series 2018-1 notes to be issued under the same program.

The outlook is stable.

Fitch said the ratings are not directly linked to the originator's credit quality. They are based on potential production and generation risk and are ultimately linked to Petrobras' issuer default rating, as it is the main source of cash flow generation.

In addition, the ratings reflect the transaction's increased liquidity, mitigation of diversion risk and increased free cash flow given the subordination of FECAM payments. The agency said these changes linked to a faster than expected deleveraging of the transaction minimize timely debt service exposure to potential disruptions.

Fitch's ratings address timely payment of interest and timely payment of principal on a quarterly basis.

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