Moody’s lowers Minas Gerais

Moody’s Investors Service said it downgraded the global scale issuer rating of the Brazilian state of Minas Gerais to B1 from Ba3.

The outlook is negative.

The downgrades reflect the rapid and ongoing deterioration of the state’s fiscal position, Moody’s said.

Continuing revenue decline and a rigid cost structure have translated into weak credit metrics that no longer compare favorably with rated peers, the agency said.

The negative outlook reflects an expectation that under Brazil’s current economic environment, the state’s credit metrics and poor liquidity position will deteriorate further, Moody’s added.

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