Moody’s Likely to Boost Brazil

Analysts expect Moody’s to raise Brazil from Ba1 to investment grade, following a review announced Monday. Goldman Sachs says that the upgrade is “highly likely” and adds that it will be a significant event. Having an investment grade rating by all 3 rating agencies, the shop says, will “open up a broader universe of strictly investment-grade investors, which could be particularly positive for corporate bond issuance.” Bulltick Capital, meanwhile, says the review “will not be an overwhelmingly market-moving event as this move was likely long overdue, expected by the market (and therefore likely priced in), as Moody’s was the only major rating agency with Brazil below investment grade, and many institutional investors such as major insurance companies can invest in a sovereign that has two out of the three investment grade ratings.” S&P and Fitch have a BBB minus rating for Brazil. Moody’s placed Brazil on review for possible upgrade based on the economy’s demonstrated resilience to shocks over the past year.