Traders Burned by Graft Scandal Now Singed by Brazil Bank Probe
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Bond investors in Brazil just can’t catch a break.
After being burned by a bribery scandal at the country’s state-owned oil company, they were buffeted again last week when federal prosecutors probing Brazil’s national development bank said the lender lost out an estimated $2 billion by setting interest rates too low for risky borrowers. The bank’s $1.75 billion in notes due 2023 have now suffered their biggest-ever weekly rout, losing 4.2 percent. The report followed two other investigations announced this month.