Standard & Poor’s downgraded Brazil’s credit rating deeper into junk territory on Wednesday, citing its failure to curb its fiscal deficit, in a surprise blow to President Dilma Rousseff`s bid to haul the economy out of its worst recession in decades. The agency cut Brazil’s sovereign credit rating to BB from BB+ with a negative outlook.
The OECD more than doubled its forecast for Brazil’s 2016 recession, projecting it will be even worse than last year. Brazil’s economy will contract 4 percent this year after a 3.8 percent recession in 2015, the organization said. “The recession in Brazil will likely be deeper than previously anticipated with ongoing political uncertainty and rising inflation,” according to the OECD report.
The Brazilian government expects to reach agreement by Friday with Samarco Mineração to settle a $4.9 billion lawsuit for damages related to a deadly November dam disaster, a spokesman for Brazil’s attorney general said on Wednesday. The government considers the tragedy the worst environmental disaster in the country’s history.
X2 Resources, the private-equity firm founded by former Xstrata Ltd. chief Mick Davis, is among companies considering a bid for Anglo American Plc’s Brazilian niobium and phosphate mines, said two people with knowledge of the matter. Anglo hired Goldman Sachs Group Inc. and Morgan Stanley to sell the assets as a package valued at $1 billion, and is expecting to receive bids next week, the people said.
Billionaire Carlos Slim’s America Movil on Tuesday reported a five-fold increase in quarterly profit, helped by a smaller loss from currency fluctuations, but tougher regulations in Mexico continued to squeeze margins at home. However, operating profit at Latin America’s largest wireless and pay TV provider fell. Grappling with tough regulation at home and deepening recession in Brazil, America Movil’s share price slipped more than 15 percent in the last year.