Venezuela: Debt Holders Expect Restructuring In Light Of Maduro’s Imminent Victory
July 27, 2024 Hour: 4:09 pm
Venezuelan debt holders are optimistic about the restructuring of this debt in the medium term, in the context of an imminent victory for Nicolas Maduro in the presidential elections this Sunday, July 28.
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The United States biggest bank and of the world’s crucial financial enterprises JPMorgan have recommended clients remain marketweight on bonds from Venezuela and its state oil company, according Reuters news agency.
Venezuela bond prices, which remain the best gauge of investor sentiment despite being in default since 2017, are more than double where they were a year ago due a US trading ban lifting on last October.
President Maduro’s government has hired Rothschild to map out its creditors while the main bondholder group already includes heavyweight funds like Fidelity, GMO and T. Rowe Price is on a recruitment drive.
In this regard, Citi Bank’s analysts are upbeat, they think the most likely scenario is a Maduro win with international recognition and see a restructuring happening “in the near term”.
Investors and bondholders say that in the strange case of an opposition winning, they will probably involve the International Monetary Fund and they will probably push for a bigger haircut (writedown of the debt), something that investors maybe will not accept.
Other analysts think that U.S. election will be just as crucial and are watching how traditionally hawkish Republican nominee Donald Trump and his Democratic rival for the White House Kamala Harris react to Venezuela’s result.
Autor: ACJ
Fuente: Reuters // Bloomberg
