Pimco, Fidelity stung by sharp fall of Petrobras' 100-year bond

Rio de Janeiro

WHEN Petroleo Brasileiro sold 100-year bonds in June, the move was largely seen as a sign the corruption-tainted oil producer had put the worst of its problems behind it.

For investors like Pacific Investment Management Co, Fidelity Management & Research Co and Capital Group Inc - the three biggest holders of the securities - that turned out to be a costly miscalculation. Since the US$2.5 billion offering, the bonds have tumbled 15 per cent. That's four times the average loss for emerging-market company debt.