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CORRECTED-Moody's to visit Brazil this week to review sovereign rating
July 14, 2015 / 5:22 PM / 2 years ago

CORRECTED-Moody's to visit Brazil this week to review sovereign rating

(Corrects first and sixth paragraph to clarify that Moody’s did not say on Monday that it was preparing a review of Brazil’s rating. Adds day of week in paragraph 4)

By Walter Brandimarte

SAO PAULO, July 13 (Reuters) - Moody’s Investors Service is preparing a highly anticipated review of Brazil’s credit rating with a visit to Brazilian policymakers and economists this week, market sources said on Monday.

Many analysts expect Moody’s to downgrade Brazil’s Baa2 credit rating by one notch at the end of its review process. Some fear it may also slap a negative outlook on the new rating, signaling the country’s investment-grade rating is at risk.

“The market is monitoring the arrival of a Moody’s mission on Wednesday, with large odds of a (rating) downgrade,” said Joao Paulo de Gracia, a trader with SLW brokerage in Sao Paulo.

A Finance Ministry spokeswoman was not immediately able to confirm the information, but Moody’s confirmed the visit without giving details.

“This is a regular technical visit similar to the ones we conduct periodically with authorities of all sovereigns Moody’s rates,” a spokesman for the ratings agency said Monday.

In recent interviews, Moody’s senior analyst Mauro Leos indicated that Moody’s was about to review Brazil by saying it will likely have elements to “discuss what to do” with Brazil’s sovereign rating after that visit.

The outlook for the new rating, Leos has said, will depend on Moody’s “assessment about the authorities’ ability to stabilize negative growth and fiscal trends during 2016.”

Brazil has been struggling to meet its budget savings target for this year as a recession hurts government revenues. (Additional reporting by Bruno Federowski in Sao Paulo; Editing by Leslie Adler and Alden Bentley)

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