S&P downgrades BESI Brasil

Standard & Poor's said it downgraded BESI Brasil to B-/C from B+/B on global scale and to brB-/brC from brBBB-/brA-3 on national scale.

The long-term ratings remain on CreditWatch negative, where they were placed on July 15.

In addition, the agency removed the global and national scale short-term ratings from CreditWatch negative.

S&P said the actions follow its July 16, similar actions on BESI Brasil’s ultimate parent, Banco Espirito Santo SA (BES) and its core subsidiary, Banco Espirito Santo de Investimento SA (BESI), which owns directly 80% of BESI Brasil.

The downgrade and CreditWatch maintenance of BES reflect that its capital position has weakened as a result of the higher losses that, according to the agency’s expectations, it is likely to face, given its direct exposure to Espirito Santo Financial Group (ESFG), to its subsidiaries and to Rio Forte.

S&P said the downgrade also reflects its view of higher risks to BES' financial position, resulting mainly from its exposure to, and links with, GES.

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