Venezuela Avoiding Default Again Shows Doomsayers May Be Wrong
- State oil company has $4.3B of bond payments due in next month
- Loomis Sayles's Sternberg says nation to default in 2016
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Over the past year, no shortage of bond investors and analysts have predicted a Venezuela default. Just last week, Loomis Sayles & Co. and Ice Canyon LLC joined the fray, saying the country, rocked by the plunge in oil prices, would likely halt debt payments next year.
Yet the cash-strapped nation has managed to stay current on its notes. Bond prices show investors increasingly expect Venezuela’s state-owned oil company to pay $4.3 billion due over the next month and the government to make good on payments of $2.1 billion due in February. After that, the country wouldn’t have another foreign debt payment on principal until August 2016.