Emerging Market Debt Bargains In Brazil, Venezuela?

Venezuela: We stay neutral on Venezuela/PDVSA at these levels – it will likely bounce around at the low levels following oil prices, but investors’ loss at default will be very limited going forward, given our relatively constructive view on the recovery value (>=35%). We stay in the low-priced PDVSA bonds. We also want to re-emphasize the fact that two bonds, the 27s and the old 18s (13.625%), do not have the so-called collective action clause (CAC), potentially drawing interest from some distressed situation accounts. Their recent outperformance may have reflected such.” More…