Pimco Lets Palocci Make Rousseff Favorite to Succeed Lula
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Antonio Palocci, who four years ago resigned as Brazil’s finance minister before the Supreme Court belatedly exonerated him of violating bank secrecy laws, can thank Pacific Investment Management Co. for helping him pave the way for Dilma Rousseff’s election as President in October.
Pimco, the world’s biggest bond fund based in Newport Beach, California, has made Brazilian debt its favorite among emerging markets mostly because of its confidence in the 49-year-old Palocci, who is a congressman from Sao Paulo state and the economic adviser to Rousseff. Brazil’s 11 percent bonds maturing in 2040, the benchmark, tripled to 137 cents on the dollar as the yield declined to 7.81 percent since Pimco increased their holdings eight years ago.