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Monday, 20 November 2017

Venezuela bond prices sink on restructuring plan

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Prices on Venezuela bonds were sinking on Friday morning after President Nicolas Maduro announced that the country planned to restructure its foreign debt.

Bond of state-owned oil company PDVSA were some of the most traded securities, with the 6% 2026s and 6% 2024s down about five points at 25.50 and 26.00, respectively, according to MarketAxess data.

If a default takes place with Maduro in power, the country’s bond prices are likely to converge around 20ct, Bank of America Merrill Lynch said.

Bonds that could hold up better under these circumstance would include the PDVSA 2020s, which are backed by Citgo shares, the bank said.

A US$842m amortization payment due on that bond was heard making its way to holders earlier this week. The bond was trading at around 70-75, down from as high as 87.00-88.00 on Wednesday.

 

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