S&P lowers Rio de Janeiro view to negative

Standard & Poor’s said it revised the outlook on the state of Rio de Janeiro to negative from stable.

The agency also said it affirmed its BBB- global scale and brAAA national scale issuer credit ratings.

The negative outlook reflects the state’s fiscal deterioration since 2012, which could hurt its liquidity, S&P said.

The negative outlook also considers an expectation that an ambitious infrastructure program amid a slumping economy could weaken the state’s credit profile, the agency said.

In addition, the state has limited flexibility to cut capital expenditure given the infrastructure needs for the upcoming 2016 Olympic Games, S&P said. It will likely continue seeking external funding for its medium-term investment plans, the agency added.

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