(Rio de Janeiro, October 13, 2005). PETRÓLEO BRASILEIRO S/A - PETROBRAS, [Bovespa: PETR3/PETR4, NYSE: PBR/PBRA, Latibex: XPBR/XPBRA], a Brazilian international energy company, informs that the rating agency Moodys Investor Services announced today an improvement in the foreign currency bond ratings of Petrobras and its wholly owned subsidiary Petrobras International Finance Company (PIFCo) from Ba1 to Baa2, leading these companies to reach the investment grade tier (with a stable outlook). The improved local currency rating from Baa1 to A2, announced on July 8 2005, was reiterated by the agency.
This decision reflects Moodys recognition of the reduction of Petrobras financial leverage, the importance of its integrated operations, and the growth in its international production and of its exports, all of which resulting in greater cash generation in foreign currencies.
PFICos rating was also upgraded to Baa2, reflecting the credit guarantees provided by Petrobras.
The change in the foreign currency bond ratings ranks Petrobras four notches above sovereign risk, which was also upgraded by Moodys from B1 to Ba3 on October 12, 2005.
Among the benefits that this new classification brings to the Company, it must be highlighted the lower cost of capital, what widen the opportunities for the development of new projects, and the possibility to improve shareholders return, increasing the Companys competitiveness.
This achievement results from the commitment of Petrobras and its workforce in running its business plan in a profitable manner, with social and environmental responsibility