Oct. 11 (Bloomberg) -- Brazil's biggest companies, including Cia. Vale do Rio Doce, are securing investment grade ratings from credit agencies, a sign the country's own rating may soon be raised.

Seven of Brazil's top 10 companies by market capitalization have either an investment grade rating or have sold bonds in the past 12 months rated at investment grade or higher by Moody's Investors Service or Standard & Poor's.

``It is definitely a positive sign to see these Brazilian companies receiving upgrades,'' said Jankiel Santos, an economist at ABN Amro Bank in Sao Paulo.

S&P yesterday assigned Vale a BBB rating, placing it four levels above the country's BB rating and one level higher than the lowest investment rating. Vale in July had its debt rating raised to investment grade by Moody's Investors Service.

Brazil itself has never had an investment grade rating. S&P rates Brazilian foreign bonds BB-, three levels below investment grade and last raised the country's rating in September 2004. A higher credit rating would help reduce borrowing costs for the government and companies in Latin America's biggest economy.

``The improvement in Brazil's fundamentals ensures the odds are for a change in the country's sovereign rating in coming months,'' Santos said. ``It is something that we are very likely to see.''

Brazil, the biggest debtor among developing nations with more than $400 billion of debt, is rated B1 by Moody's, which put the country's debt on positive outlook on Jan. 12.

``I couldn't tell you exactly when it will happen but Brazil does appear to be on course to obtain a investment grade rating,'' said Gustavo Franco a partner at Rio Bravo Investments in Rio de Janeiro and president of Brazil's central bank from 1997 to 1999.

The yield to the 2015 call date on Brazil's benchmark 11 percent bond maturing in 2040 was unchanged at 8.2 percent, and the yield to maturity was also unchanged at 9.13 percent, according to JPMorgan Chase & Co. at noon in New York. The price, which moves inversely to the yield, was unchanged at 119.55.

To contact the reporter on this story: Andrew J. Barden in Sao Paulo at barden@bloomberg.net

Last Updated: October 11, 2005 13:37 EDT