A decision by a major credit-rating firm to downgrade to junk status the debt of Petróleo Brasileiro SA is stoking fears that Brazil’s sovereign rating could be next. Moody’s Investors Service late Tuesday slashed the debt of the company, known as Petrobras, two notches to Ba2, two steps below investment grade, on continued concern about the fallout from a corruption scandal and the state-run oil giant’s ability to pay down about $135 billion in debt. The downgrade was the third by Moody’s since October. Still, the size and timing of Tuesday’s cut surprised some analysts and sent the country’s leaders into a defensive crouch. Brazil’s largest company, Petrobras plays an outsize role in the nation’s economy, which is flirting with recession. Petrobras’s newfound junk status is “an unequivocal blow” to the administration […]