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Brazil has been upgraded by a notch to Ba1 from Ba2 by Moody’s. The upgrade reflects material credit improvements, including a more robust growth performance and a growing track record of economic and fiscal reforms by the country. According to Moody’s, Brazil’s economic performance from 2022 to 2024 surpassed expectations, fueled by cyclical factors and structural reforms. Growth was robust across industry and services, supported by higher investment and a stronger labor market with rising real wages. Despite a polarized political landscape, significant reforms in monetary policy, central bank independence, state-owned enterprise governance, and the business environment have been implemented. An upcoming tax regime overhaul is anticipated to boost long-term growth potential. Moody’s has a positive outlook on Brazil, reflecting potential for sustained growth and effective spending measures, which could help meet fiscal framework targets and reduce uncertainty around the country’s debt trajectory.
Brazil’s dollar bonds have returned 5-7% in Q3. Its 6% 2026s traded stable at 102.5, yielding 4.3%.