One in four Fitch-rated corporates in Latin America is exposed to either a one-notch sovereign or country ceiling downgrade, while ratings for nearly one-third of issuers are vulnerable to a two-notch downgrade, according to the latest from Fitch Ratings.
Embattled and leaner Brazilian President Dilma Rousseff said on Wednesday that a country is not defined by its credit rating, downplaying Standard & Poor's decision to assign junk status to Latin American largest economy's sovereign debt.
Argentine shares and bonds plunged on Thursday as investors reacted to the failed negotiations between Argentina and the holdout hedge funds in New York. At the Buenos Aires City stock market the Merval index closed down by 8.4% to 8,187.99 points, far from yesterday’s record 6.9% climb.
Standard & Poor's cut Brazil's sovereign debt rating closer to speculative territory in a blow to President Dilma Rousseff administration. Brazil had its long-term debt rating downgraded to BBB minus, the agency's lowest investment-grade rating. S&P changed its outlook to stable from negative, meaning further downgrades are unlikely for now, which will come as a relief for both politicians in Brasilia and financial markets.The move was widely expected but the timing surprised some investors.
Moody's warned Thursday it may cut the credit ratings of 17 global and 114 European financial institutions in another sign the impact of the Euro zone government debt crisis is spreading throughout the global financial system.
Moody's Investors Service on Thursday slashed Spain's sovereign debt rating by a notch to Aa2 with a negative outlook, saying it was uncertain about the country's ability to improve its finances.