Venezuela, PDVSA improve before meeting that leaves some fearing worst; Ezdan bonds drop

By Rebecca Melvin

New York, Nov. 13 – Venezuela and Petroleos de Venezuela SA bond prices improved somewhat on Monday ahead of a bondholder meeting that provided little to no clarity on how Venezuela hopes to restructure or refinance its debt.

Most bonds were better by about 1½ points, a trader said.

Market focus has now shifted to a ruling expected on Tuesday by the International Swaps and Derivatives Association, a trader said after the market close.

“I expect that ‘failure to pay’ will be declared, and hence the bonds would enter into default territory,” the trader said.

“Venezuela is just buying time,” a trader said, “I just heard several law firms are being hired by institutional investors. People are preparing for the worst.”

Elsewhere, Qatar’s Ezdan Holding Group 2021 and 2022 notes saw dramatic spread widening in the early going on Monday as listed shares fell 5% after news that the real estate developer is restructuring its operations.

The Ezdan 4 3/8% notes due 2021 were seen at 88 bid, 90 offered with spreads going from 65 basis points wider to 175 bps wider, according to a London-based firm.

The Ezdan 4 7/8% notes due 2022 were quoted at 88.45 bid, 89.90 offered, with spreads widening to 200 bps from 75 bps.

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