Brazil

Markit is preparing to launch what it said will be the first tradable emerging markets interest rate swap index.

The pain continued for the Brazilian steel sector on Friday as leading producer Gerdau suffered the loss of its first investment grade rating.

Steelmaker Companhia Siderurgica Nacional (CSN) could be the next major Brazilian corporate to be forced into a debt restructuring, Fitch Ratings has warned.

Fitch downgraded Odebrecht Offshore Drilling Finance (OODF) from B- to CCC on Monday, highlighting its concerns that the Brazilian issuer’s discussions with bondholders could lead to a restructuring of its bonds.

After three consecutive years of record volumes, in 2015 Latin American bond market momentum was halted by crises in Brazil and plunging commodity prices. Though volatility will continue and issuers and investors often struggle to meet on price, the market looks mature enough for a modest recovery in 2016. Oliver West reports.

Despite the currency tanking against the dollar in 2015, investment in Brazilian real denominated medium term notes is at a healthy level.

Bad news seems determined to afflict Brazil until the very end of the year as Joaquim Levy’s resignation on Friday sent bonds to new lows with much of the market in holiday mode.

For most observes it had already become a matter of time. Standard & Poor’s had already made Brazil a sub-investment grade borrower and both Fitch and Moody’s had Latin America’s largest sovereign on review for downgrade.

Good news from the US Federal Reserve — in the form of a more dovish rate announcement than some market participants had expected — brought a sanguine close to a turbulent week for credit derivatives and boosted equity markets, but only added to the pressure on emerging market countries and their currencies.

Brazilian sugar and ethanol producer Tonon Bioenergia has filed for bankruptcy after many months of battling low prices, and Standard & Poor’s is pessimistic on bondholders’ recovery chances.

Brazil took a step closer to sub-investment grade status on Wednesday when Moody’s placed its Baa3 rating on review for downgrade.

Huw Jenkins will need all of his powers of persuasion and banking know-how if BTG Pactual, where he is a founding partner, is to halt its downward spiral.