PDVSA recoups losses as recount announced, Maduro sworn in; Homex debt pops on asset sale news

By Stephanie N. Rotondo

Phoenix, April 19 - Emerging market continued to be in focus in the distressed debt space as the week came to a close.

Petroleos de Venezuela SA bonds firmed Friday, after spending most of the week on the down side. The gains came as Nicolas Maduro was set to be sworn in as president, though the agency in charge of the election said it would bow to pressure to recount certain electronic votes that were not immediately counted after the April 14 election.

Meanwhile, Desarrolladora Homex SAB's debt popped as much as 21 points on the day on news the Mexican homebuilder was selling its stake in certain federal penitentiaries to billionaire investor Carlos Slim.

The gains came just days after the company's bonds dropped to a record low.

Among domestic issuers, a trader said AMR Corp.'s debt was trading strong around 116 as the company nears its bankruptcy exit.

Edison Mission Energy paper was also firm, given a recent increase in natural gas prices. A trader placed the 7% notes due 2017 at 55½ and the 7.2% notes due 2019 at 551/4.

PDVSA regains ground

PDVSA's bonds were moving up on Friday, following news out late Thursday regarding a recount of the April 14 election results.

The Venezuelan electoral council agreed to recount certain electronic votes that had not been immediately counted following the recent election.

However, the narrowly elected winner Nicolas Maduro was slated to be sworn into the office of president on Friday.

There was no timeline as to when the recount might occur, though the council said it would announce such a schedule next week.

A trader saw the 8½% notes due 2017 rise nearly 1½ points to 96.9, while the 9¾% notes due 2035 gained almost 2 points to 94 7/8.

On Friday, Standard & Poor's said it had revised the nation's outlook to negative from stable, citing the political uncertainty and how that might effect economic policy and its implementation.

Homex rises on prison sale

Mexican homebuilder Homex jumped 17 to 21 points on the day on news it was selling its stakes in federal prisons located in Morelos and Chiapas to Carlos Slim's Grupo Financiero Inbursa SAB and his infrastructure firm Impulsora del Desarrollo y el Empleo en America Latina SAB.

Homex is expected to raise $327 million from the sale. A closing date was not disclosed.

A trader saw the 9¾% notes due 2020 put on at least 17 points, trading in a 79 to 80 context on Friday. That compared to levels in the high-50s on Thursday, he said.

The 7½% notes due 2015 and the 9½% notes due 2015 were meantime seen up over 21 points at 86½ and 811/2, respectively.

Last week, Homex said it was looking at ways to raise cash in order to shore up liquidity. Proceeds from the prison stake sale will be used for such purposes and to pay down debt.

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