Fitch Ratings downgrades IDRs of Financiadora de Estudos e Projetos-FINEP.

Sao Paolo: Fitch Ratings, a nationally recognized statistical rating organization (NRSRO) designated by the U.S. Securities and Exchange Commission, downgraded the Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) of Financiadora de Estudos e Projetos-FINEP to 'BB-'from 'BB'.

With Rating Outlook Stable, the rating actions follow the recent downgrade of Brazil's sovereign ratings to 'BB-' from 'BB'/Stable Outlook (see Fitch Downgrades Brazil's Ratings to 'BB-'; Revises Outlook to Stable', dated Feb. 23, 2018 at www.fitchratings.com).

At present, FINEP's ratings are equalized with the sponsor's ratings, the Federative Republic of Brazil. Fitch has classified FINEP as a credit linked Government Related Enterprise reflecting a strong correlation with the sovereign. Fitch believes there is very high probability of FINEP receiving extraordinary sovereign support if needed.

It assumes a high level of sovereign support for FINEP even considering the weak institutional framework given full ownership by the Federal Government and ongoing subsidized credit lines via other federal institutions and federal funds.