B for Brazil

摘要

To "B" or not to "B", that is the question. Brazil's bond markets have been rising on rumours that the big credit-rating agencies may soon upgrade the country. Moody's currently rates the government's long-term foreign debt as "B2", five notches below the coveted "investment grade" that it awarded Mexico in March, while Standard & Poor's puts Brazil's debt at "B+", four notches below investment grade (see chart). The country's B-grades make it expensive to raise long-term finance, and not only for the government: regardless of their own credit record and ability to pay, Brazilian firms suffer because the government's rating usually sets a ceiling for corporate bonds.