S&P Global Ratings on Dec. 14 downgraded its global scale rating on Banco de Desenvolvimento de Minas Gerais SA to B- from BB- due to the worsening finances of the state of Minas Gerais, a major shareholder of the bank.

The rating agency also lowered the bank's national scale rating to brB- from brA. The outlook is negative.

S&P believes the weakened financial condition of Minas Gerais limits the banks' ratings due to the very strong link between them. The state has delayed payments to suppliers and public-sector employee salaries, raising questions over its capability to pay its financial obligations due in the next 12 months, S&P said. The state declared a financial emergency Dec. 5.

S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.