Brazil's Quest to Make the Grade

By Bamrud, Joachim | Global Finance, September 2006 | Go to article overview

Brazil's Quest to Make the Grade


Bamrud, Joachim, Global Finance


BRAZIL

Brazil is gradually improving its sovereign debt credit rating. When and how will it reach investment grade?

Gustavo Franco, a well-respected former president of Brazil's central bank who now works as executive director of Rio Bravo Asset Management, has no doubts as to the benefits of Brazil's achieving investment grade by the international credit rating bureaus. "[An upgrade] would result in a major boost for capital markets and, more importantly, a major multiplication of asset values in Brazil," he says. "It will bring a sustained and significant decrease in the cost of capital in Brazil, and, with that, the denominator for all valuations of assets in Brazil will be reduced and consequently values will increase-by very significant multiples."

So much for the benefits. The question remains whether-and when-Brazil might achieve investment grade. "We're not expecting anything quickly," says Lisa Schineller, the primary credit analyst at Standard & Poor's. In order for Brazil to reach investment grade, the country must first reduce its debt, interest and tax rates, reform social security further and reduce the rigidity of government expenditures, she says.

Although it has reduced its debt significantly in recent years, Brazil still has a net debt ratio of 47% of GDP, which is considerably higher than its peers, according to Standard & Poor's. By comparison, Mexico has a net debt ratio of 31% of GDP. Ratings agency Moody's explains why the debt ratio is so crucial for improving Brazil's rating. "A positive credit outlook contemplates that favorable trends observed to date will be preserved leading to further reductions in Brazil's overall debt burden over time," the agency said in its latest credit opinion on Brazil, released in June. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Brazil's Quest to Make the Grade
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Author Advanced search

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.