‘Hyper focus’ on Venezuela, PDVSA as bonds drop heading into Maduro vote; Atento prices notes

By Rebecca Melvin

New York, July 28 –Venezuela and Petroleos de Venezuela SA dropped further on Friday as selling accelerated ahead of a national election being held on Sunday to vote in a so-called constituent assembly.

Last week, the United States threatened to impose sanctions against Venezuela if President Nicolas Maduro held the vote. And many believe that U.S. economic sanctions against Venezuela would almost certainly guarantee a sovereign debt default.

A default with Maduro as the nation’s leader would be the worst-case scenario for debt holders, a New York-based analyst told Prospect News.

Venezuela has about $70 billion of international debt, including $36.7 billion of sovereign bonds and $32 billion of PDVSA bonds, and not including loans, the analyst said.

“There is hyper focus on [Venezuela and PDVSA] since nobody wants to be long into the weekend,” a New York-based trader said.

Because of being swamped with the Venezuela flow, the trader was not able to watch other areas of the market like a new deal from Atento SA for $400 million of 6 1/8% notes. The five-year notes priced at par on Friday.

Among bonds in trade were PDVSA’s 6% notes due 2026, which fell to as low as 32¼ by late morning. The all-time low for that bond was right around 30.

The PDVSA 8½% notes due 2017 slid down to 75 bid, 76 offered, down from 77 bid, 79 offered on Friday.

© 2015 Prospect News.
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