NEW YORK (Standard&Poor's CreditWire) June 29, 2001--Standard&Poor's today affirmed its sovereign credit ratings and stable outlook on the Federative Republic of Brazil. Standard&Poor's affirmed its double-'B'-plus long-term local, double-'B'-minus long-term foreign, and single-'B' short-term local and foreign currency sovereign credit ratings on the republic. The stable outlook balances the Cardoso government's commitment to appropriate policy actions against a worsening macroeconomic climate and more challenging domestic political scene as the 2002 elections approach. Brazil's ratings are constrained by: -- A high fiscal debt burden. The general government interest payments burden is very high, projected at 8% of GDP in 2001, or 28% of revenue. The decline in rollover risk since 1999 (owing to maturity lengthening)
