Bill Gross Covers Brazil CDS Trade ‘Just In Time’
By Tyler Durden
Back in October 2015, Bloomberg reported that Bill Gross made a big bet that Brazil’s credit was improving. He sold enough Brazil CDS to make it a top 10 holding of his $1.4bn Janus Global Unconstrained Bond Fund. As Bloomberg pointed out, the contract maturities were December 2015, March 2016, and June 2016. This was just after CDS prices were starting to come down from recent highs.
Fast forward to today, a time when Brazil just posted its largest budget deficit ever, the economy is expected to contract 3.6%, and the political landscape is in complete meltdown mode as a result of President Rousseff’s impeachment. Bill Gross’ decision to exit the position in March, just as CDS prices are beginning to spike again seems almost prescient.
Bloomberg notes that the fund may still have positions left in Brazil CDS, they’re no longer among the top ten holdings.
Source: Bill Gross Covers Brazil CDS Trade ‘Just In Time’
