Brazil’s Record Overseas Borrowing Comes Back to Bite Companies

Brazilian companies including state oil producer Petrobras are at risk from a weakening real after they issued a record amount of debt in foreign currency. The mismatch prompted PresidentDilma Rousseff to say over the weekend that she’s “extremely concerned” about the situation.

Borrowing in overseas markets by non-finance companies reached a record $137 billion last year, seven times the level just a decade earlier, according to the Bank for International Settlements. Petroleo Brasileiro SA, with $56 billion of outstanding bonds, has become the world’s largest non-investment grade corporate issuer after Standard & Poor’s cut its rating this month following a similar move by Moody’s Investors Service.

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