Morning Commentary: Venezuela, PDVSA better bid, but clearing problems arise

By Rebecca Melvin

New York, Aug. 31 – Venezuela and Petroleos de Venezuela SA bonds were better bid in the early going on Thursday, but clearing problems were beginning to arise, according to market sources.

Prices were rebounding after news of a possible repurchase of Venezuela bonds by the Chinese, a trader said. And the expectation was that Venezuela would continue to be able to make debt payments in October and November.

But clearing problems were beginning to surface, with trades that couldn’t settle because of clearing restrictions. It was unclear how widespread the problem was becoming.

On Wednesday the Depository Trust & Clearing Corp. said it would no longer settle certain trades of Venezuela and Petroleos de Venezuela SA bonds, but DTC later reinstated services.

One trader said early Thursday that he hadn’t heard much about clearing problems but that it wouldn’t surprise him if more clearing firms decide not to trade Venezuela bonds.

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