Venezuela's PdVSA Misses $404 Million Payments on Bonds
November 21 2016 - 7:10PM
Dow Jones News
Petró leos de Venezuela SA missed $404 million in coupon
payments on three of its bonds, highlighting the continued
struggles of the Venezuelan state oil company.
The company, which is often known as PdVSA, failed to make
payments last week on bonds maturing in 2021, 2024 and 2035,
according to J.P. Morgan Chase & Co. In a note to clients, J.P.
Morgan cited reports from PdVSA's paying agent Citigroup and
Clearstream, a clearinghouse that handles the payments. PdVSA
didn't respond to a request for comment.
PdVSA now is in technical default and will have a 30-day grace
period to cure the default if it makes the payments, J.P. Morgan
said.
"We still believe PdVSA will make these payments," the J.P.
Morgan analysts said. They pointed to Venezuela's reported $10.9
billion international reserves as of Nov. 17 and the company's
recent efforts to reduce its cash drain by extending the term of
some bonds using a debt swap.
The missed payments hit a nerve among investors because many are
worried Venezuela, whose oil industry constitutes the lifeblood of
its struggling economy, is believed by many to be on the verge of
default. Despite the concerns, Venezuela hasn't missed any debt
payment since 2002, according to Russ Dallen, a managing partner at
Caracas Capital.
PdVSA paid more than $2 billion over the past two months to its
bondholders. It also made a $135 million interest payment on its
2026 notes on Tuesday, before missing payments on the three bonds
on Wednesday and Thursday.
Last month, PdVSA swapped $2.8 billion of 2017 notes for debt
maturing in 2020, after several rounds of extensions. The debt
exchange provided some relief to the struggling oil company, as it
helped reduce its short-term cash squeeze.
PdVSA bonds maturing in 2035 traded at 46.5 cents on dollar of
par value, up from 45 cents last week. The bond currently yields
22.3%. PdVSA bond prices generally have fallen significantly since
the U.S. election on Nov. 8, reflecting in part sharp increases in
the value of the dollar and questions about how Trump
administration policies might affect global trade.
Write to Carolyn Cui at carolyn.cui@wsj.com
(END) Dow Jones Newswires
November 21, 2016 18:55 ET (23:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
JP Morgan Chase (NYSE:JPM)
Historical Stock Chart
From Aug 2024 to Sep 2024
JP Morgan Chase (NYSE:JPM)
Historical Stock Chart
From Sep 2023 to Sep 2024