Moody's: Sharp rise in number of Brazilian companies on border of speculative grade ratings during Q1 2015

Moody's Investors Service said the number of Brazilian companies facing potential speculative grade ratings more than doubled in the first quarter of 2015.

In a new report, Moody's said that the rise in Brazilian companies rated Baa3 with a negative outlook or on review for downgrade had moved Latin America into the lead in terms of regions with largest share of companies facing potential movement into speculative grade territory.

"Since the start of this year, more companies in Brazil have come under risk of falling below investment grade ratings," said Moody's Vice President Mark Stodden. "While the Brazilian economy remains weak, we see more risk that companies lose their investment grade ratings or become 'fallen angels', so to speak."

Moody's analysts noted that Q1 2015 saw a record number of companies ratings fall out of investment grade. Globally, twenty-six companies ratings were downgraded to speculative grade versus just twenty-four for all of 2014. Of the companies downgraded to spec grade since the start of 2015, eighteen were related to the downgrade of Russia's sovereign rating.

The report, "Focus Shifts to Brazil From Russia After Record Number of Fallen Angels," is part of a quarterly series from Moody's analyzing the movement of global non-financial companies through the rating categories closest to the line between investment grade and speculative grade.