By Brazil Stock Guide – S&P Global Ratings downgraded Raízen S.A. (B3: RAIZ4) on Monday (Dec. 15), cutting the company’s global corporate credit rating to BBB- from BBB and maintaining a negative outlook, citing delayed deleveraging, heavy cash consumption and uncertainty around asset sales and a potential capital injection. The move leaves the Brazilian fuel and bioenergy group on the last rung of investment grade under S&P’s global scale.
According to the agency, Raízen’s leverage reached 5.6 times net debt to EBITDA in the 12 months ended September 2025 and is expected to remain elevated — between 4.5x and 5.0x — through fiscal years 2026 and 2027, even assuming a gradual operational recovery. Free cash flow remains deeply negative, constrained by high capex, rising interest costs and working capital needs, limiting the pace of balance-sheet repair.
How other agencies see the credit
The downgrade brings S&P closer to an assessment already signaled by peer agencies. Fitch Ratings keeps Raízen at BBB- on the global scale, also with a negative outlook, indicating a tangible risk of losing investment-grade status if deleveraging fails to materialize. On the national scale, Fitch continues to assign AAA(bra) with a stable outlook, reflecting relative strength within the domestic market rather than absolute credit risk.
Moody’s Investors Service remains the most conservative. The agency rates Raízen at Ba1 globally — one notch below investment grade — with the credit under review since November 2025. On the national scale, Moody’s assigns AAA.br, but with a negative outlook, underscoring structural rather than cyclical pressure on the company’s financial profile.
Before Monday’s action, S&P itself still rated Raízen at BBB globally with a negative outlook, while the national rating stood at brAAA, stable since January. The downgrade removes that remaining buffer and formally places the company at the bottom of the investment-grade spectrum.
Global ratings under strain
The widening gap between domestic and global ratings remains a defining feature of Raízen’s credit story. While national-scale ratings stay anchored at the top, supported by scale, market relevance and access to local liquidity, global ratings focus squarely on leverage, negative free cash flow and execution risk surrounding asset sales and capital raising.
With Moody’s already classifying the company as high yield and both S&P and Fitch now positioned at the lowest investment-grade level, Raízen’s margin for error has narrowed sharply. Absent swift execution on deleveraging — through asset disposals, equity injection or a material turnaround in cash generation — the risk of further downgrades has shifted from a tail risk to a central element of the company’s credit outlook.