Brazilian credits were rebounding Thursday from earlier lows after S&P downgraded the country, which is facing its worst economic crisis in decades, to junk.
Troubled state oil giant Petrobras saw its 2024s widen 40bp-50bp on the news of the downgrade on Wednesday before tightening to 695bp-685bp.
The sovereign’s five-year CDS was trading at around 390bp Thursday morning after hitting an earlier wide of 407bp, while its benchmark 2025s were at 89.75 versus 90.75 Wednesday.
Market participants believe much of the bad news surrounding the downgrade to BB+ from BBB- was already priced in.
Brazil Energy Insight 
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