Venezuela, PDVSA bonds quiet in trade after word of second creditor group demanding payment

By Rebecca Melvin

New York, Dec. 17 – Venezuela’s sovereign bonds and those of Petroleos de Venezuela SA did not react much to news on Monday that a second group of creditors in as many weeks has demanded payment on a bond that is in default, a New York-based trading source said.

Investors, represented by Washington-based law firm Robbins Russell, are demanding payment on about $380 million of the 2034 bonds, according to a report on Monday.

Venezuela’s bonds due 2034 were not trading on Monday, the source said, but it was likely that it would be trading on Tuesday or later in the week.

The group’s step taken to recover the bondholders’ investment is the second such move after a group of bondholders hired law firm Cleary Gottlieb Steen & Hamilton LLP to advise on strategic alternatives last week.

The Venezuela creditors committee has been waiting for more than a year to receive payments of about $9 billion from the government, PDVSA and state-owned electricity company Elecar, the law firm said.

None of the Venezuela bond universe traded notably on Monday, after having moved up about 0.5 point to 0.75 point last week.

“There was nothing out of the ordinary, to be honest,” a New York-based source said.

The Venezuela 2022 bonds were seen at 24.5 bid, 25.5 offered on Monday. The 2027 bonds were 23.57 bid, 24.75 offered.

PDVSA’s nine bond issues trade 15% to 20% lower than the sovereign curve in the mid-teens, the source said.

The socialist government of president Nicolas Maduro is sagging under the weight of hyperinflation, and the sovereign and state-owned entities owe nearly $8 billion in unpaid interest and principal following default earlier this year.

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