Venezuela, PDVSA extend gains on ‘truce’ hopes; new Vedanta slips; EM sovereigns weaker

By Rebecca Melvin

New York, Aug. 4 – Venezuela and Petroleos de Venezuela SA bonds continued to lift on Friday amid confidence that debt interest will be paid by the isolated sovereign on Saturday and despite ongoing uncertainty about the country’s political situation.

The bonds are going up on speculation that there will be a truce between the opposition and the government, a trader said.

Venezuela and PDVSA bonds started the day lower but moved up and closed about 1.5 points higher on the day.

The near-dated PDVSA bonds due later this year was 83 bid, 84 offered near the close after earlier trades at 82¼.

Elsewhere in emerging markets, Vedanta Resources plc’s newly priced notes slipped below par on Friday after the metals and mining company priced $1 billion of the 2024 notes at par to yield 6 1/8%. That was the midpoint of guidance, which had been revised down from 6 3/8% initially talked.

The new Vedanta notes were down to around 99.60 bid, 99.90 offered, a London-based market source said.

The deal broke on a day when emerging markets sovereigns saw a little bit of selling across the board after a stronger-than-expected U.S. nonfarm payrolls report for July sent U.S. Treasuries lower.

“Things were marked down with the Treasuries move,” a London-based sellsider said.

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