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Petrobras has announced that the credit rating agency Standard & Poors (S&P) has upgraded its rating for the company's corporate debt to 'BB-' from 'B+' and changed its outlook to stable from negative.

In a statement, Petrobras said: "The agency stated that the improvement in Petrobras' rating reflects the evolution of its liquidity and a robust cash position that confers greater capacity to handle eventual liabilities. The recovery in the relationship with domestic and foreign banks and in Petrobras' capacity to access capital markets was also highlighted by the agency, which considered debt management operations to be positive. The progress in the Divestment Program and the perspectives to reach the targets set for 2017 and 2018 were also emphasized.

"Standard & Poor's further stressed the management's focus on profitability, a more balanced capital structure, and the commitment to deleverage the company, as well as the consistency of the new Pricing Policy, which enables greater visibility over Petrobras' cash flow."

A year ago, S&P downgraded Petrobras's foreign currency bond rating to 'B+' from 'BB' after cutting Brazil's sovereign rating.

S&P defines a 'BB'-class rating, which also covers Petrobras's new 'BB-' grading, as an indication that the company's debts are "less vulnerable to nonpayment than other speculative issues."

S&P adds, however, that "it faces major ongoing uncertainties or exposure to adverse business, financial, or economic conditions which could lead to the obligor's inadequate capacity to meet its financial commitment on the obligation."