Venezuela Default More Likely on Sovereign Bonds Than PDVSA's: Bondholders
Venezuela Default More Likely on Sovereign Bonds Than PDVSA's: Bondholders
“I have a hard time seeing [the government] making sovereign payments next year,” said Francisco Rodriguez, chief economist at hedge fund Torino Capital, during a Venezuela forum at AS/COA.
Venezuela is more likely to default on its sovereign bonds than on those of state-run oil company PDVSA given how essential the latter’s cash flow is to the country’s fortunes, bondholders and legal experts have said.
Both asset classes cratered last month after President Nicolas Maduro told creditors that Venezuela wanted to restructure its foreign debt, which includes some $60 billion in bonds issued by PDVSA PDVSA.UL and its owner, the Venezuelan government...
The Venezuelan government may soon be running low on cash, forcing it to make some hard decisions. Its crude output dipped last month to the lowest level in nearly three decades, producer group OPEC said. And about two dozen high-level PDVSA executives have been arrested in a major corruption sweep, ridding the company of much of its top brass.
“I have a hard time seeing them making sovereign payments next year,” Francisco Rodriguez, chief economist at hedge fund Torino Capital, said during a panel discussion on Venezuela sponsored by the Americas Society/Council of the Americas in New York....
