Junk Bonds in Europe Find Greater Losses From Brazil Than China
- Casino Guichard and Grupo Isolux among the worst performers
- Latin American country heads toward deepening recession
Houses stand behind a playground at the Rocinha favela in Rio de Janeiro, Brazil. Brazil’s economy grew less than the euro area in 2014, the first time since 2001. The International Monetary Fund forecast a contraction of 3.5 percent this year and stagnation next, after a 3.8 percent recession in 2015.
Photographer: Nadia Sussman/BloombergEuropean investors focused on risks from China to the east should also be looking west.
More than half of the region’s worst-performing junk bonds in euros over the past year were sold by companies with operations in Brazil, exceeding those with even indirect exposure to China, according to data compiled by Bloomberg. Bonds sold by French retailer Casino Guichard-Perrachon SA and Spanish engineering firm Grupo Isolux Corsan SA, both with links to Latin America’s largest economy, are among 10 billion euros ($11 billion) of securities with the biggest losses.