Moody’s: Three Brazilian issuers on review

Moody’s Investors Service said it placed on review for downgrade the long-term local-currency global and national scale issuer ratings of Banco de Desenvolvimento de Minas Gerais SA, Agencia de Fomento do Parana SA (Fomento Parana) and Desenvolve SP – Agencia de Fomento do Estado de Sao Paulo SA (Desenvolve SP).

The standalone baseline credit assessments and short-term ratings on these companies are unchanged.

The downgrade review follows news that Moody’s placed the ratings of government-shareholders under review for downgrade, including the State of Minas Gerais, State of Parana and the State of Sao Paulo.

Banco de Desenvolvimento’s long-term global local-currency issuer rating of Ba1 and long-term Brazilian national scale issuer rating of Aa2.br was placed on downgrade review, along with Fomento Parana’s long-term global local-currency issuer rating of Ba1 and long-term Brazilian national scale issuer rating of Aa2.br.

Desenvolve SP’s long-term global local-currency issuer rating of Ba1 and long-term Brazilian national scale issuer rating of Aa2.br also were placed on downgrade review.

These companies are considered government-related issuers and so are affected by the downgrade review of the Brazilian municipalities, Moody’s said.

The reviews will consider the close macroeconomic and institutional linkages between the credit quality of state and municipal governments in Brazil and that of the federal government, the agency said.

The ongoing deterioration of Brazil’s economy will continue to have a direct impact on the operating environment of Brazilian states and municipalities, Moody’s added.

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