Petroleo Brasileiro SA, the state-controlled oil producer with $55 billion of overseas bonds, is among the Brazilian companies most at risk of seeing leverage ratios swell as the real posts the world’s biggest currency losses.
For Petrobras, the electric utility known as Eletrobras, airline Gol Linhas Aereas Inteligentes SA and mall operator General Shopping Brasil SA, every 10 percent depreciation in the real boosts the companies’ debt-to-earnings ratio by a factor of one, according to Fitch Ratings.
The companies, with a combined $60.1 billion of overseas bonds outstanding, are vulnerable to a falling real because they have high levels of foreign-currency debt while most of their sales are in the local tender, said Joe Bormann, a managing director for Latin America corporate finance at Fitch. The ratings company has Petrobras at the lowest level of investment grade, while the other companies are classified as junk.
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