World's Worst CoCo Bonds Come Courtesy of Brazil's Government
- Notes are worst performers among emerging-market CoCo bonds
- Investors are concerned about weakening fiscal accounts
QuickTake: The CoCo Bond Experiment
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Banco do Brasil SA is getting crushed in the bond market because of its government ties.
Contingent-convertible notes issued by the state-controlled bank, which are vulnerable to being written down to zero if capital ratios fall too low, have fallen the most among 133 similar CoCo securities denominated in euros or dollars. The bank’s $1.64 billion of bonds sold in 2012 have tumbled 25 percent in 2016, seven times the average.