MELBOURNE (Standard&Poor's) July 3, 2002--Standard&Poor's today took ratings actions on a number of Brazilian financial institutions, following the lowering of the Federative Republic of Brazil's foreign and local currency ratings to single-'B'-plus and double-'B', respectively (see rating list below). The downgrade of the sovereign ratings reflects rising public debt, which further reduces the country's fiscal flexibility (see related press release). Ever-tighter fiscal management is necessary to maintain debt to GDP at current levels, given the worsening domestic debt profile and heightened market concerns over political uncertainties. The negative outlook on the sovereign was maintained, given that fiscal and external vulnerabilities require ongoing commitment to appropriate policies in a demanding internal and external environment, and allow little
