Moody's ups some Brazilian future flow transactions

Moody's Investors Service said it upgraded the long-term foreign-currency ratings of certain Brazilian future flow transactions backed by diversified payment rights.

This upgrade concludes Moody's review that initiated on June 6.

The agency said that the upgrades are the result of the higher local currency ratings of certain Brazilian banks.

The global local currency ratings of five of the Brazilian banks that originate the flows backing the transactions or are now higher than they were when the transactions were originally rated, the agency noted, adding that the global local currency deposit ratings of Banco Itau, Banco Bradesco, Banco do Brasil, Unibanco and HSBC Bank Brasil are currently A1 and the global local currency deposit rating of Banco Santander is now A3 (positive outlook).

In addition, the agency said that the ratings of future flow deals traditionally incorporated the risk of sovereign interference, which was the risk that the government would divert the assigned cash flows that back repayment of the notes away from the trust collection account.

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