Following recent corruption allegations against President Michel Temer, Brazil's political backdrop has once again become more complicated. Amid increased political uncertainty, some progress in addressing considerable fiscal and economic challenges in the context of an already prolonged adjustment path is at risk of stalling. We are placing our 'BB' long-term foreign and local currency sovereign credit ratings on CreditWatch with negative implications. The CreditWatch listing reflects increased risk that a disruptive or slow resolution of recent political developments could delay and undermine the ability of Brazil's political class to advance corrective policy measures in a timely fashion--in this instance, ahead of the 2018 presidential and legislative elections--while its economic and fiscal challenges continue to mount. On May 22, 2017, S&P
