Standard & Poor’s downgraded Brazil’s credit rating to junk grade on Wednesday, further hampering President Dilma Rousseff’s efforts to regain investors’ trust and pull Latin America’s largest economy out of recession.
The faster-than-anticipated downgrade from investment grade will likely rock Brazilian financial markets on Thursday and will increase borrowing costs for the government and Brazilian companies.
Brazil first won its investment-grade credit rating in 2008 and the S&P downgrade is a major setback for Rousseff, a leftist struggling to kick-start the economy and shore up weak public finances.
It further sours market sentiment about the country and Brazilian assets will suffer because many investors will perceive higher risks.
S&P cut Brazil’s rating to BB-plus, the highest junk rating, from BBB-minus.
Brazil Energy Insight 
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