Moody’ upgrade brings its Brazil ratings in line with Fitch’, while S&P’ ratings for Brazil are one notch lower.
Brazil’ foreign currency debt ratings are now Baa3/BBB-/BBB (Moodys/S&P’/Fitch). No doubt S&P’ will feel pressure to upgrade Brazil in short order. Moody’ and Fitch’ ratings for Brazil are no longer at the lowest investment grade rating level (2nd lowest). With two major rating agencies putting Brazil at a mid-BBB level, it will increase EM external debt investors’ comfort level with its tight CDS spread (118bp) and relative level vs other benchmarks.