Moody's ups Brazilian banks

Moody's Investors Service said it upgraded to B2 from B3 the long- term foreign currency deposit ratings of all rated Brazilian banks. The foreign deposit ratings of the Brazilian banks are currently at the country ceiling levels.

The long-term foreign currency debt ratings of Banco Rural SA and Banco Santos SA have been upgraded to B1 from B2. The long-term foreign currency debt rating of Banco Votorantim SA has been upgraded to Ba3 from B1. All other long-term foreign currency debts of Brazilian banks rated by Moody's have been upgraded to Ba2 from Ba3.

These debt ratings pierce Brazil's foreign currency country ceiling rating for bonds and notes, in accordance with Moody's policy of allowing certain qualified issuers of certain asset classes to pierce the country ceiling.

The outlook on all ratings remains stable.

The rating action is the direct result of Moody's having upgraded Brazil's country ceiling for foreign currency bonds and notes to B1 from B2 as well as Brazil's country ceiling for foreign currency bank deposits to B2 from B3. The local currency government bond rating was also upgraded to Ba3 from B2.

The upgrade reflects Moody's view that a continued export expansion combined with less reliance on foreign-currency borrowing - which has sharply reduced the ratio of external debt to exports - is sustainable.

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