Sovereigns to be Tested Next Year: Moody’s

LatAm sovereign credit ratings will be under increased pressure next year, Moody’s senior economist Mauro Leos says, particularly Brazil, Peru and Colombia – which the agency is keeping a notch below investment grade. “The ratings will be tested next year,” Leos tells a Moody’s panel on LatAm securitization in New York. He adds that they were not really being tested much this year thanks to strong growth and healthy fundamentals. The economist says his shop feels the ratings are robust at the moment, but much will depend on what happens with financial flows, the US recession and commodity prices. Lower rated credits such as Uruguay, Costa Rica and Panama, have ratings that already contemplate volatility, he adds.