Shares retreated 0.9 percent to 29.33 reais at the close in Sao Paulo, extending their decline this quarter to 8 percent.
Bradesco had its standalone ratings cut by Moody’s Investors Service late yesterday by three levels to Baa1. The stock extended a decline after Estado de S. Paulo columnist Sonia Racy reported on the newspaper’s website that the bank is buying Belo Horizonte, Brazil-based BMG, without saying where she obtained the information.
Bradesco and BMG declined to comment when contacted by Bloomberg News.
Bradesco was one of eight Brazilian lenders that Moody’s cut as part of a global review of banks rated higher than their home countries, the ratings company said in a statement. Itau Unibanco Holding SA (ITUB4) fell 0.9 percent to 27.25 reais in Sao Paulo, while Banco do Brasil SA, the country’s largest lender, declined 0.2 percent to 18.76 reais.
“This downgrade confirms a negative sentiment investors already had about Brazilian banks, because of rising delinquency rates and the government’s pressure for them to lower the rates they charge,” Felipe Martins Silveira, an analyst at brokerage Coinvalores, said by phone from Sao Paulo.
Banco BMG’s dollar bonds due in 2018 rose 7 cents to 90 cents on the dollar at 5:29 p.m. in Sao Paulo, after earlier touching 93 cents, the highest since March 14, according to Trace, the bond price-reporting system of the Financial Industry Regulatory Authority. The yield dropped 184 basis points, or 1.84 percentage point, to 10.33 percent.
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