SAO PAULO, Jan 29 (Reuters) -

Moody's Investors Service upgraded the debt ratings of Brazilian planemaker Embraer by one notch, to Ba1 from Ba2, while keeping its outlook stable.

The upgrade to Ba1 nonetheless keeps Embraer in Moody's speculative grade status, commonly known as junk. Still, the upgrade "reflects the improvement in credit metrics related to a gradual recovery in deliveries, operating performance and backlog, as well the company's proactive debt reduction," the ratings agency noted in a statement. (Reporting by Peter Frontini and Andre Romani; Editing by David Alire Garcia)