Paula Sambo, Ney Hayashi Cruz – Bloomberg Business, 12/16/2015
Brazil’s breathtaking fall from investor favorite to emerging-market pariah shows no signs of slowing.
On Wednesday, Latin America’s largest economy lost its investment-grade status when Fitch Ratings became the second of the three main debt-ratings firms to cut Brazil to junk. And a third downgrade, this time by Moody’s Investors Service, can’t be far behind as fiscal accounts deteriorate and a political stalemate persists, according to Torino Capital LLC’s Jorge Piedrahita.
Instead of rising star, Brazil now has a new title: world’s largest junk-rated sovereign borrower. It’s a stunning reversal from its heyday in the late 2000s when the country, riding the commodities boom, shrugged off the financial crisis that rocked the developed world and won its first investment grade.