Banco do Brasil capital drop triggers hybrid downgrade

Banco do Brasil capital drop triggers hybrid downgrade

Corporate & Sovereign Strategy

Standard & Poor’s has cut the rating on Banco do Brasil’s $3.75bn of new-style hybrid tier one instruments a notch to B+, saying the risk of losses on the securities has increased. The downgrade comes after the Brazilian state-owned lender reported a core capital ratio of 7.83% at the end of the first quarter. That was 41bp lower than three months earlier, and has fallen since October with Brazil’s implementation of stricter capital standards under Basel III. The bank’s lower capital ratio raise

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