The Brazilian state of Minas Gerais formally joined the Fiscal Recovery Regime (FRR), which provides legal certainty on continued debt relief and supports fiscal consolidation. The state's fiscal profile, however, is projected to weaken in 2025 amid a gradual rise in debt service costs (according to the FRR terms) but should gradually improve as fiscal adjustment measures take hold. As a result, we revised our outlook on the State of Minas Gerais to positive from stable and affirmed our 'CCC+' global scale and 'brBB' national scale ratings. The positive outlook indicates our view that the state likely will continue to benefit from debt relief and avoid default despite its structurally weak, but slowly improving, fiscal position. On Jan. 27, 2025,
