Venezuela defaulted on part of its $2.5 billion loan from
Russia's state-controlled oil company Rosneft once again, giving Wall Street
bond lords cause for concern that a default on PDVSA oil bonds is right around
the corner. PDVSA is a quasi-sovereign and is the government's only remaining
cash cow. The government owed Rosneft a reported $950 million. News of the
missed payment sent Venezuela’s $3 billion government bond due 2022 to trade at
around 57 cents, for an annualized yield of 29.3% for those lucky (or unlucky)
enough to be buyers at those levels. Assuming the par value of the bond was
$100, that means the bond is now worth $57. Some bondholders in London
immediately questioned whether or not the missed Russia payment constituted a
default, the Financial Times reported. The International Swaps and Derivatives
Association said it did not. More…
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