There's a Glimmer of Hope for Venezuelan Bondholders
By- Reserves jumped $151 million on Friday, according to data
- Government using grace period (without announcing it) on notes
Venezuela Inches Closer to Dictatorship
Venezuelan bondholders are looking for a sign (any sign) that late interest payments will be arriving in their accounts soon. And in the absence of formal announcements or statements from the issuer, investors are tracking the few data points available.
That’s why some creditors may feel a bit more optimistic after seeing $151 million deposited into reserves on Friday (the data was published late Monday). While still meager, that’s the biggest cash injection since Aug. 31st, and the first time the total reserve level has been above $10 billion since early September.
There are currently about $350 million of interest payments from PDVSA, the government and state-run utility Electricidad de Caracas past due. There’s some speculation the government will use the 30-day grace period until making $3.5 billion of more pressing debt payments through Nov. 2.
After bonds tanked on Monday following a disputed regional election that increased the likelihood of sanctions from the U.S. and European Union, the market is more in sit-and-wait mode Tuesday with the PDVSA 2017 bond due in two weeks (a barometer for payment conviction) trading at 92.2 cents on the dollar.
— With assistance by Katia Porzecanski
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