Venezuela's bonds rally after US trading ban lifted
By Rodrigo Campos and Mayela Armas
NEW YORK/CARACAS (Reuters) -Venezuela's sovereign bonds rallied on Thursday, a day after the United States lifted its ban on secondary market trading of some of the country's eurobonds, with investors eyeing a debt restructuring on some $60 billion of defaulted debt.
Prices more than doubled for some sovereign bonds, with a 2018 Venezuela issue up 8.75 cents at 17 cents. A 2020 note of state oil company PDVSA was up 13 cents at 66.5 cents.
«Prices have almost doubled in the past 24 hours but are still well below the pre-sanctioned levels,» said Edward Cowen, CEO of Winterbrook Capital, who has co-invested in a fund to buy Venezuelan debt.
A return to Venezuela's regular weighting on global indexes like JPMorgan's would give the prices further support, Cowen added.
JPMorgan said late on Thursday that Venezuela stands at a zero weight in its EMBI indices since 2019 and further clarification is expected from the index team on the move by Treasury.
On Wednesday, the U.S. Treasury Department said it had amended two licenses to remove its long-held secondary market trading ban on certain Venezuelan sovereign bonds and on the debt and equity of state-run oil company PDVSA, in response to a deal reached between the government and opposition parties for the 2024 election.
«There is room for further upside if the Maduro regime follows through on its political commitments,» said Samy Muaddi, lead manager of the T. Rowe Price Emerging Markets Bond Fund.
«There is cause for optimism in what remains a tragic period for the Venezuelan people.»
Bondholders had been lobbying for the move for a long time, a source familiar with the situation said, and funds were immediately jumping on calls to discuss
Read more on investing.com
