Venezuela

Investors in and brokers of Venezuelan bonds say that the government is looking to sell up to $5bn of 6.5% bonds due 2036 that were issued at the end of last year but have remained in the hands of the central bank.

Goldman Sachs sparked the ire of Venezuelan opposition supporters and several bond investors this week as it bought $2.8bn of PDVSA bonds at a hefty discount that put the yield at 40%.

South American development bank CAF sold its largest ever bond in Australian dollars on Tuesday, pricing a new 10.5 year deal through its existing curve thanks in part to strong demand from Japanese investors.

Lat Am bond investors are keeping a close eye on Venezuelan state-owned oil giant PDVSA in the run-up to the company’s next amortisation payment in April, with the source of funds used for the payment set to provide important clues as to the likelihood of default.

Economists at the Institute of International Finance (IIF) said on Monday that they believed Venezuela was “rapidly approaching breaking point”, despite movements in the short end of the country’s curve suggesting investors are less pessimistic.

South American development bank Corporación Andina de Fomento (CAF) sold R$220.2m ($69.46m) of Brazilian real-denominated Uridashi notes on Tuesday in its first deal in the currency.

South American development bank Corporación Andina de Fomento (CAF) returned to the euro market this week to raise €750m of five year notes amid a hectic time in both SSA and Latin American markets.

Venezuela’s surprise issuance of $5bn of 20 year bonds in a private placement sold this week to state-owned Banco de Venezuela had no obvious explanation, said bond market participants.

Cash strapped Venezuela has issued $5bn of 20 year bonds in a private placement sold to state-owned Banco de Venezuela and the central bank.

PDVSA is doing itself no favours by bending the truth about its financial situation. Bondholders are under no illusions about its troubles, so the company might as well be open with them.

PDVSA is doing itself no favours by bending the truth about its financial situation. Bondholders are under no illusions about its troubles, so the company might as well be open with them.

Whether PDVSA bondholders choose to believe JP Morgan’s EM research team, or if they agree with the Venezuelan company’s CEO that the US bank is an “enemy of the fatherland”, they cannot have had a particularly reassuring run-up to Thanksgiving, after the borrower’s coupon payments went missing. Oliver West reports.