In Brazil’s Bad Year, These Corporate Borrowers Were Hardest Hit

For Brazil, 2015 was never going to be a banner year. But even the pessimists were surprised by how bad it actually turned out to be.

Latin America’s largest economy was hit by crisis after crisis: A colossal corruption scandal. The worst recession in a quarter century. A growing fiscal deficit. The arrest of a billionaire banker. A mining catastrophe. The start of presidential impeachment proceedings. Political paralysis. And, finally, the loss of its coveted investment grade.

“I can’t remember a year this bad since I started working in the market back in 1996,” said Rodrigo Borges, the 43-year-old chief investment officer for fixed income at Franklin Templeton in Sao Paulo. “I can’t give a prognosis for next year — of course it will be a bad one in terms of growth — but so much of what’s going on now is unprecedented.”

Government debt also suffered: A gauge of sovereign notes measured by JPMorgan has tumbled 13 percent, the most since 1998. The cost of insuring the nation’s debt using credit-default swaps approached an 11-year high this month, signaling the perception of risk is almost three times that for Mexico.

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