Banco do Brasil Falls to Six-Year Low After Brazil Downgrade
- Brazil's federally owned bank leads other lenders lower
- Credit-rating downgrade is likely to increase funding costs
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Banco do Brasil SA’s bonds declined and its shares sank to a six-year low, leading a drop among Brazilian banks on concern a cut in the nation’s credit rating to junk will mean higher funding costs for lenders.
State-owned firms such as Brasilia-based Banco do Brasil will probably be hardest-hit by Standard & Poor’s decision to downgrade Brazil on Wednesday, said Max Bohm, an analyst at consulting firm Empiricus Research. The rating company reduced the country to BB+ with a negative outlook.