Moody's upgrades Brazil oil giant Petrobras' ratings

Credit-rating agency Moody's Investors Service "upgraded all ratings" for Brazil state oil giant Petrobras, the agency said on Monday.

Reflecting "Moody's expectation of continued improvement in the company's liquidity profile and financial metrics over the next 12 months," the agency upgraded Petrobras' credit rating to B1 from B2.

It also "raised the company's baseline credit assessment" to B2 from B3.

"The outlook for all ratings was changed to positive from stable," Moody's said, adding it recognized that "Petrobras' management has shown commitment to its financial and operating targets, as shown in recent debt refinancing transactions, disciplined use of cash, increasing crude production and declining costs."

Brazil's biggest company lost its good standing with credit rating agencies following revelations that top executives accepted bribes and kickbacks from construction companies, a scheme that cost the enterprise and Brazil millions in inflated contracts.

The company is not out of the woods yet, the agency said.

Negative ratings "could result from deterioration in operating performance or external factors that increase liquidity risk or debt leverage from current levels. Downgrades could also be prompted if negative developments from the corruption investigations or litigation against the company appear to have the potential to significantly worsen the company's liquidity or financial profile," said the Moody's.

Debt-burdened Petrobras slashed expected investment for the 2017-2021 period by 25 percent as part of an adjustment plan to curb spending and pay off its debts. Endit