December 15, 2017 |
The Brazilian government is expected to pass legislation that could hurt the ratings of local banks by reducing sovereign support, Fitch Ratings said in a report.
The new law could put downward pressure on Brazil's systemically important banks' support rating floors, which currently range from BB+ to BB-. Senior debt ratings will also be revised if the new law establishes that the debt class ranks below unsecured deposits, Fitch said.
The bail-in mechanism, which will define the hierarchy of los
Possible new law threatens to reduce sovereign support, rating agency says