Following the downgrade of Brazilian sovereign ratings on Oct. 15, Fitch Ratings downgraded the foreign currency Issuer Default Ratings (IDRs) of several Brazilian corporations.
The Brazilian sovereign foreign and local currency IDRs dropped from BBB to BBB- and the country ceiling from BBB+ to BBB. The current foreign currency rating is Negative. Brazil’s rising debt, challenges to fiscal consolidation and economic growth and political climate are all factors in the downgrade.
While the foreign currency IDRs were downgraded, the local currency IDRs of several affected corporations were affirmed. Among the corporations with foreign and local currency and senior unsecured notes downgraded from ‘BBB+’ to ‘BBB’ was Cielo S.A., while Itaipu Binacional was downgraded from BBB to BBB- and Globo Comunicacao e Participacoes S.A. foreign currency IDR and senior unsecured notes were downgraded to BBB. The local currency was affirmed at BBB+, though.
Corporations affirmed at their current ratings included Ache Laboratorios Farmaceuticos S.A., BRF S.A., Sadia Overseas Ltd., BFF International Ltd., Localiza Rent a Car S.A., Raizen Energia S.A., Raizen Combustiveis S.A., Raizen Energy Finance Limited, Samarco Mineracao S.A., Tractebel Energia S.A., Transmissora Alianca de Energia Eletrica S.A., Vale S.A., Vale Overseas Limited, Vale Canada Limited, Votorantim Cimentos S.A., Votorantim Participacoes S.A., Votorantim Industrial S.A., Companhia Brasileira de Aluminio S.A. and Voto-Votorantim Overseas Trading Operations IV Limited.
