Fitch Ratings downgraded the debt of Brazil’s OGX Petroleo e Gas SA on Friday after the company agreed to spend about $540 million to buy and develop 13 Brazilian oil and gas exploration blocks that it picked up at a government auction on Tuesday.
Fitch cut OGX’s issuer default rating to “B minus” from “B” and the rating on $3.7 billion of notes sold by its Austrian subsidiary to “B-minus/RR4” from “B/RR4”. The block purchases will put pressure on OGX cash as the company struggles to get its existing, underperforming offshore oil wells to produce more revenue, Fitch said. On March 31, OGX has $4 billion of debt and $1.1 billion of cash.
$1 = 2.0365 Brazilian reais Editing by Bob Burgdorfer