Moody's ups local government foreign-currency ratings in Brazil

Moody's Investors Service said it upgraded the foreign currency issuer ratings of three subnational governments in Brazil: Ceara, Sao Paulo and Curitiba, to Ba2 from Ba3.

The action was prompted by Moody's revision of its rating methodology for assigning foreign currency country bond ceilings.

Moody's said the revised methodology resulted in upgrades to the foreign currency bond ceilings of a number of countries, including Brazil, whose ceiling was raised to Ba2 from Ba3.

The higher ceilings reflect Moody's view that in many countries, even if the national government were to default on its own foreign currency debt, the probability of a foreign currency moratorium is less than 100%.

The outlook is stable for Ceara and Sao Paulo, while the outlook is positive for Curitiba.

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