UPDATE 1-Brazil upgrade allows more investment-Mantega

(Adds quotes from finance minister, background)

By Walter Brandimarte

NEW YORK, Sept 22 (Reuters) - More pension funds will be allowed to invest in Brazil after Moody's Investors Service upgraded the country to investment grade, Brazil's Finance Minister Guido Mantega said on Tuesday.

Moody's was the latest of the three key rating agencies to lift Brazil to the coveted investment-grade level. It upgraded Brazil's sovereign ratings by one notch to Baa3, and put them on positive watch, meaning it could raise them further.

More-conservative pension funds can only invest in assets given investment-grade status by the three big agencies.

"That is a recognition of the good management of the Brazilian economy," Mantega told reporters as he left a meeting with Moody's analysts in New York.

The minister highlighted the fact Brazil was upgraded right after the global financial crisis and said it underscored the resilience of its economy.

"It is much more significant than to be upgraded in a moment when all countries are growing," he said.

(Reporting by Walter Brandimarte; Editing by Andrew Hay, +1 646 489 6319)