# Raízen Cut to BBB- by S&P, Sliding to Edge of Investment Grade

*Rating agency cites delayed deleveraging and cash burn as Moody’s already treats credit as high yield.*

- Published: 2025-12-15
- Section: Insights
- Tags: Brazil corporate debt, Credit Rating, Fitch Ratings, Moody’s, Raízen, S&P Global Ratings
- URL: https://brazilstockguide.com/insights/raizen-sp-downgrade-bbb-minus-credit-ratings/

**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.

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Source: Brazil Stock Guide, https://brazilstockguide.com/insights/raizen-sp-downgrade-bbb-minus-credit-ratings/