Fitch has upgraded long-term ratings of four Brazilian states and two cities

Fitch Ratings has upgraded the long-term national ratings of four Brazilian states and two cities, with a stable outlook. The ratings were upgraded from AA(bra) to AAA(bra), the highest level on the national scale.

The regions affected by the risk rating adjustment include:

the State of São Paulo;
the State of Alagoas;
the State of Rio de Janeiro;
the State of Paraná;
the city of São Paulo;
the city of Niterói.

These changes reflect an overall improvement in the national rating.

On July 26, the sovereign risk rating of the country was upgraded from BB- to BB, with a stable outlook.

According to Fitch, this rating results from the “better than expected macroeconomic performance.”

As per the statement released on Thursday, the ratings of the States of São Paulo, Alagoas, and Rio de Janeiro benefited from “intergovernmental financial support and are equalized to the implied national scale rating for the Brazilian sovereign.”

RATING

Rating revisions are used to modify classifications for reasons unrelated to credit quality, aiming to reflect changes in a country’s national rating scale and relative risk levels.

On a national scale, the ratings measure relative default vulnerability on legal obligations for local issuers in Brazil, excluding transfer and convertibility risks.

Fitch reviews the ratings assigned at least once a year.

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