Moody's lifts Brazil Development note to A1

Moody's Investors Service said it upgraded Brazil Development Funding Corp.'s secured notes due 2011 to A1 from A3 following the upgrade of the local-currency issuer ratings of Brazil-based Banco Nacional de Desenvolvimento Econômico e Social - BNDES to A1.

The rating assigned to the notes is linked to the fundamental credit quality of BNDES, as reflected by its global local-currency rating. As a result of this linkage, any further change in that rating may also result in a change in the rating of the structured notes, the agency noted.

The structured notes currently benefit from an inconvertibility and non-transferability insurance policy provided by Sovereign Risk Insurance Ltd. that is available to make scheduled interest payments on the notes for a period of 18 months if the issuers cannot make the required payments offshore to noteholders in foreign currency under the indenture because the Brazilian government has imposed restrictions on the conversion or transfer of foreign exchange, Fitch said.

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