S&P gives Petro Rio B+, notes BB-

S&P said it assigned Petro Rio SA a B+ issuer rating and gave BB- and 2 recovery ratings to its planned senior secured notes. The recovery rating indicates substantial recovery (70%-90%) in default.

Earlier this year, the company raised R$2 billion in an equity follow on giving it a healthy liquidity cushion, S&P said.

A forecast for higher oil prices along with gains in efficiency and scale, should allow EBITDA margins to improve to about 65% in 2021 and 65%-70% in 2022, from 62% in 2020, the agency said.

The outlook is stable, mirroring an expectation that Petro Rio will maintain gross debt to EBITDA consistently below 3x while continuing to invest in production growth.

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