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25 Feb 2015
Brazil closer to ‘junk’ status? – BBH
FXStreet (Edinburgh) - The research team at BBH assessed the likeliness of Brazil’s credit rating to be downgraded to ‘junk’ status.
Key Quotes
“Petrobras’ credit rating was cut to junk by Moody’s yesterday. The move was expected given the dire situation the company is in, but it may have been more aggressive than many had thought”.
“The agency cut the company to Ba2, two levels below investment grade, and kept a negative outlook”.
“The other two major rating agencies still have Petrobras as investment grade, but only just. It’s a matter of time until they follow suit”.
“Bonds are already trading in high-yield territory, with the 2024 bond at 7.2% yield. The same bond made a low at 4.74% in September last year”.
“The move on Petrobras will likely stoke concerns that the sovereign rating will downgraded too”.
“Our model shows Brazil teetering on the edge of junk status, but likely has a few month honeymoon until a move is likely. The corruption and domestic political developments will make it hard for Dilma to focus on the needed fiscal reforms”.
Key Quotes
“Petrobras’ credit rating was cut to junk by Moody’s yesterday. The move was expected given the dire situation the company is in, but it may have been more aggressive than many had thought”.
“The agency cut the company to Ba2, two levels below investment grade, and kept a negative outlook”.
“The other two major rating agencies still have Petrobras as investment grade, but only just. It’s a matter of time until they follow suit”.
“Bonds are already trading in high-yield territory, with the 2024 bond at 7.2% yield. The same bond made a low at 4.74% in September last year”.
“The move on Petrobras will likely stoke concerns that the sovereign rating will downgraded too”.
“Our model shows Brazil teetering on the edge of junk status, but likely has a few month honeymoon until a move is likely. The corruption and domestic political developments will make it hard for Dilma to focus on the needed fiscal reforms”.