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Moody’s Strips Brazil of Investment Grade Status

The agency is lowering Brazil's ratings by two notches, from Baa3 to Baa2 with a negative outlook
By The News · 24 of February 2016 09:31:19
Brazil Credit Rating, FILE - In this Tuesday, Dec. 1, 2015, file photo, a street vendor sells shoes and shirts in Sao Paulo's shopping district, Brazil. Latin America's largest economy has shrunk even more than expected, increasing fears about the well-being of a nation hammered by falling commodity prices and a massive corruption scandal. Moody’s, the credit ratings agency, stripped on Wednesday, Feb. 24, 2016, Brazil of its investment grade status. In lowering Brazil’s ratings by two notches, from Baa3 to Baa2 with a negative outlook, Moody’s is the last of the three major credit ratings agencies to cut Brazil to junk status.(AP Photo/Andre Penner, File), No available

THE ASSOCIATED PRESS

RIO DE JANEIRO — The credit ratings agency Moody’s has stripped Brazil of its investment grade status.

The agency is lowering Brazil’s ratings by two notches, from Baa3 to Baa2 with a negative outlook. Moody’s is the last of the three major credit ratings agencies to cut Brazil to junk status. Fitch Ratings lowered its rating for Brazil in December, mirroring a similar move by Standard & Poor’s in September.

In a note accompanying its decision on Wednesday, Moody’s says the downgrade is driven by worries over an increase in government debt “in a low-growth environment” and the country’s “challenging political dynamics”.

Brazil is in the midst of its worst recession since the 1930s. Last week, the central bank published figures showing that the country’s economy shrank more than 4 percent in 2015.