Moody’s lowers Brazilian GRIs

Moody's America Latina said it downgraded the long-term global local currency and Brazilian national scale issuer ratings assigned to the following government-related institutions:

• Banco de Desenvolvimento de Minas Gerais SA: Long-term global local currency issuer rating to Ba3 from Ba1 with a negative outlook, long-term Brazilian national scale issuer rating to A2.br from Aa2.br and baseline credit assessment to ba3 from ba2;

• Agencia de Fomento do Parana SA: Long-term global local currency issuer rating to Ba3 from Ba1 with a stable outlook, long-term Brazilian national scale issuer rating to A2.br from Aa2.br and baseline credit assessment to ba3 from ba2;

• Desenvolve SP – Agencia de Fomento do Estado de São Paulo SA: Long-term global local currency issuer rating to Ba2 from Ba1 with a negative outlook; and

• Companhia de Desenvolvimento Habitacional e Urbano do Estado de Sao Paulo SA: Long-term global local currency issuer rating to B2 from B1 with a stable outlook, long-term Brazilian national scale issuer rating to Baa3.br from Baa2.br and short-term Brazilian national scale issuer rating to BR-3 from BR-2.

These actions follows Moody's Feb. 24 announcement that it downgraded the ratings of these government-related institutions' (GRIs) government-shareholders, including the States of Minas Gerais, Parana and Sao Paulo.

The downgrade of the state governments' ratings considers the close macroeconomic and institutional linkages between the state and federal governments. The ongoing deterioration of Brazil's economy has had and will continue to have a direct impact on the creditworthiness of the Brazilian states.

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