Minas Gerais has taken significant steps to participate in Brazil's Fiscal Recovery Regime (FRR), which would improve the state's fiscal profile gradually and maintain the central government's financial support in 2023 and afterward. The state is benefiting from intergovernmental debt forgiveness as a compensation for a mandatory reduction in local tax rates. We upgraded Minas Gerais on the global scale to 'CCC+' and on the national scale to 'brBB' from 'SD'. The stable outlook reflects our view that in the next 24 months, the state will continue to improve its currently very weak fiscal profile gradually while the central government services Minas Gerais' debt. On Oct. 27, 2022, S&P Global Ratings raised its long-term foreign and local currency issuer credit
